Home warranty

In the UK, the term home warranty refers to the warranty and insurance provided with new build homes by the likes of NHBC and GHW. Usually lasting for 10 years, the new home warranty and insurance protects the first or subsequent purchasers of the new build home against damage caused by structural defects that might arise as a consequence of poor workmanship during the build process.

NHBC has about 80% market share in the UK of the new homes warranty market. Only builders registered with NHBC can offer their warranty product and NHBC checks the build quality of new homes offered with their warranty at key stages during the construction process.

In the USA, home warranty is a contractual agreement provided to an owner of a house by any of a number of different types of entities such as home builders, risk management groups, or others. The home warranty industry was founded in 1971 by American Home Shield. In the strictest legal sense a warranty of any kind within the United States must adhere to guidelines set at the states' and federal government's levels. However, the words "home warranty" are not always used explicitly to mean a legal warranty is being conveyed. In many cases, at least in the United States, a home warranty is not a warranty at all, but rather a home service contract that covers the repair and/or replacement costs of home appliances, major systems such as heating and cooling, and possibly other components of a home, structural or otherwise. The home service contract generally covers home systems such as the home’s plumbing or electrical, and appliances like dishwashers that fail from old age/normal wear and tear. Coverage varies significantly across home warranty companies. Home warranty contracts do not cover all home repairs.