Home warranty insurance is also
referred to as ‘home indemnity,’
‘builders warranty’ or ‘builders
indemnity.’ But the different names are
not the most confusing aspect; there are
substantial misconceptions in respect
to this form of insurance, which we will
aim to clarify.
What is covered, and when it is
needed, varies from state to state. This
is one of the principal reasons that
you’ll often receive incorrect advice or
no clear advice at all. Many people take
out the insurance at the last minute
because, even though they are advised
of the requirement, they do not fully
understand what it is for.
Unfortunately you’ll find that
even professionals in this area still
occasionally get the information
wrong, due to differences in legislative
requirements in each state. The
information contained in this article
provides an explanation of the
requirements for each state, with the
information sourced directly from the
relevant authorities.
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Let’s start by looking at what it is for,
and then we’ll move onto the issue of
when it is needed and how to go about
obtaining it…
Firstly, it’s important to avoid
confusing home warranty insurance with
construction insurance. Construction
insurance covers contract works, such
as the structure you are erecting and
the building materials, against loss
or damage, and also provides public
liability cover during the actual project.
This insurance is always essential and
should be obtained before work starts.
Policy coverage
The Builders’ Home Warranty
Insurance covers loss or damage resulting
from non-completion of the work, loss of
deposit, or breach of statutory warranty
if the property owner cannot recover
compensation from the builder because
of the following situations:
• death of the builder
• disappearance of the builder
• insolvency of the builder. |
