New-Home Warranties
You will most likely receive a builder's warranty — usually a one-year protection plan — against problems with your new house. Like most warranties, these plans cover the house against structural defects and malfunctions of the working systems. However, if your builder goes out of business or is no longer on the scene for some other reason, you will be out of luck; your chances of being reimbursed for repairs will be practically nonexistent.
Try to secure both a builder's and an independent warranty. Chances are the builder will provide a one-year protection plan. But in the event he refuses to offer a warranty, you should purchase a policy on your own. A few hundred dollars is a small amount to pay to insure the proper functioning of a much larger investment.
However, if you have an insured, independent warranty you will still be covered. Such plans are usually ten-year policies written by an independent warrantor, for example Homeowners Warranty (HOW). If anything goes awry with your builder, your claim — if considered a legitimate one — will be honored by those warrantors.
