fact sheet: buying a home

new home warranties

In British Columbia, new home warranty insurance is mandatory for all new homes that are built by licensed residential builders. This insurance provides coverage for defects in materials and labour, structural defects, and major systems such as plumbing, electrical and heating.

The warranty insurance in British Columbia is provided by private insurance companies that are approved by the Homeowner Protection Office (HPO). Builders are required to purchase the warranty insurance on behalf of their clients, and the coverage typically lasts for 2-5-10 years, depending on the type of coverage.

Here is how it works in a general summary:

Coverage: New home warranty insurance typically covers three main areas:

a) 2-year coverage for defects in labour and materials;

b) 5-year coverage for defects in the building envelope, including water penetration; and

c) 10-year coverage for structural defects.

It's important to note that different insurance providers may have slightly different coverage options and limitations, so it's essential to carefully review the terms and conditions of the policy.

Mandatory requirement: Builders in British Columbia are required by law to provide their clients with new home warranty insurance. This requirement helps ensure that homebuyers are protected against potential issues that may arise during the construction process or in the early years of homeownership.

Claims process: In the event that a homeowner experiences a defect or issue that is covered under the policy, they can file a claim with the warranty insurance provider. The homeowner will need to provide documentation and evidence of the issue, and the insurance provider will conduct an investigation to determine if the claim is valid. If the claim is approved, the insurance provider will either arrange for repairs or provide financial compensation to cover the costs of the repairs.

Transferability: New home warranty insurance is typically transferable to subsequent owners of the home, which can be an added selling feature if the original homeowner decides to sell the property.

Overall, new home warranty insurance in British Columbia provides peace of mind for homebuyers by protecting them against potential issues and defects in their new home. It's important to carefully review the terms and conditions of the policy to understand what is covered and what is not, and to work with a reputable builder who adheres to the requirements of the law.

For more detailed information visit BC Housing’s webpage on Home Warranty Insurance.

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