Are you looking for the best home warranty for your newly constructed home? If so, you are in the right place.
In this guide, we answer questions like:
- Do you need a home warranty when you purchase a newly built home?
- What are home protection plans available for new constructions?
- How much will a home warranty cost for your new home?
- Are home warranties for new homes different?
- What do you need to think about before committing to a home warranty?
- And much more…
At Review Home Warranties, we have looked at nearly 70 home service contract companies across the United States. We compared the coverage options, costs, consumer reports, repair timeframes, and more to determine which companies offer the best products. Keep reading to learn more!
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What's In This Guide?
We then reviewed each provider’s coverage to determine which offers the most beneficial plans for new homes.
So, take a look at what we found. At the end, you will find our top choices with plan information, a review of the service, and the pros and cons of each provider.
What Are Home Warranties Meant For New Construction?
Newly constructed properties have different needs. While you probably have less to worry about in terms of needing a total system replacement, there is no guarantee that any of your home systems and appliances, no matter what the age, will continue to work correctly.
Homebuilders only guarantee their work for a few years, and appliances are sometimes not covered under the builder’s warranty. So, if any of your devices malfunction after they no longer have coverage under a manufacturer’s guarantee, you are responsible for paying for the repair or replacement.
Many homeowners want to avoid these costly repairs, and they want to make sure their property is in excellent condition for years to come. So, they invest in a home warranty plan.
Top 5 Best Home Warranties For New Construction
What Does A Home Warranty For A New Construction Cost?
Home warranties cost the same amount, whether you are buying a plan for a new property or an older home. The annual or monthly payments will depend on the level of coverage you select.
Most companies offer three types of plans, Appliances, Systems, and Combos. An Appliance or Systems plan starts at around $35 per month. Combo Plan protection packages usually start at $50 per month.
So, you are looking at a yearly investment between $400 and $650. Some companies offer discounts if you pay for the plan upfront.
Deductibles and Fees
In addition to your yearly or monthly payment, there are other fees you are responsible for as a service contract holder. Additional costs you may have to pay include:
- Service call fees
- Transfer fees
- Cancellation fees
- Disposal fees
- Permits and building code violations
Most of the top providers offer affordable deductibles. Some even allow you to select your service fees. The lower the deductible you choose, the higher the monthly or yearly fee.
How Do Home Warranties For New Constructions Work (Are They Unique)?
When you buy a newly built home, most states require the builder to provide a warranty. The warranty you receive from the builder is not as comprehensive as the protection you receive from a top home warranty provider.
Year 1: Coverage For Most Home Components
During the first year after you close on your new construction, you will receive robust coverage from your builder. However, your contract stipulates how repairs are made, and often homeowners are left waiting for the contractor.
Appliance repairs for any items that did not come with the house are also not included. Many homeowners bring appliances from their previous home.
During the first year as a new homeowner, while your major systems have protection under builder’s and manufacturer’s warranties, you may want to purchase an appliances-only plan.
Year 1-5: Coverage For Major Systems
After the first year, most homebuilder warranties reduce coverage to only major home systems and severe structural damage due to craftsmanship. Your policy will likely include your air conditioner, heating pumps, water heater, garbage disposal, plumbing system, electrical system, and ductwork for between two and five years.
Your builder policy does not cover plumbing stoppages or other value-added features like:
- Free air filters
- Semi-annual HVAC maintenance
- Discounts on auto repairs
- Discounts on parts and labor for items not included in your plan
- Free limited roof leaks
Years 1 – 10: Coverage For Major Structural Defects
After the first five years, your new construction home warranty will only cover significant structural damage caused by poor craftsmanship or faulty materials. The policy will not cover storm, flood, fire, or accidental damage, though.
Furthermore, the plan will not cover any cosmetic or minor structural defects after the first year. So, after the first two to five years, the coverage is sparse.
Builder Warranties vs. Home Service Contracts
While builder warranties and service contracts are similar, there are also some differences. As a homebuyer, you must know how these two types of property protection work.
State Mandated Builder Warranties
Most states require builders to provide a warranty with each new home they sell. Some states regulate the length of time the policy must be effective, while others require a one-year warranty. Home warranties or service contracts, on the other hand, are not a requirement, and consumers typically purchase these plans out of pocket.
Home Warranty Work Timeframes
Home service contract providers have extensive networks of service technicians. So, home warranty customers typically enjoy shorter wait times, especially in emergencies.
Some builders warranty the necessary items to meet state consumer protection requirements themselves, while others use a company like 2-10 Home Builder’s Warranty. If the builder warranties the property, you may have to wait a while for them to complete repairs.
With a home warranty from a top company, you can expect service calls to take between 24 and 48 hours. Home warranty companies have extensive networks of service technicians available to complete repairs quickly.
A comprehensive plan from one of the best home warranties for new constructions will cost you between $400 and $650 per year. Leading warranty companies give you the option of breaking the annual fee down into more affordable monthly payments.
Some providers also give you the option of selecting a higher deductible in exchange for a lower monthly payment, and others give you a discount for paying for your plan upfront.
These plans differ in terms of the items covered, as well. For the first year, the builder plan covers more items, as these plan cover windows, blinds, faucets, flooring defects, and other cosmetic repairs a service contract does not.
After the first year, the builder guarantee is similar to a systems plan. However, the builder warranty does not cover as many repairs.
Another way the coverage differs is in deductibles. Under the developer home warranty coverage, you typically do not have to pay a deductible.
When you call in a service request on your service contract, you are responsible for paying a deductible. These service fees range from $75 to $150 per call depending on your home service contract provider.
During the first year, your new construction insurance policy covers more items than the average home warranty. Both plans cover normal wear but do not pay for repairs caused by natural disasters or accidents (homeowners insurance handles these claims).
Your builder coverage will likely also exclude your clothes washer, well pump, pool and spa, and other systems you install after you close.
Are you still confused about what your new home warranty will and will not cover? We do not blame you, it can be confusing. Below is a video that should help you understand what your builder warranty includes.
Is A Home Warranty For Your New Home Worth It?
Even when you purchase a newly built home, you enjoy greater peace of mind when you have a home protection company by your side. While most builders provide a builder warranty, these plans offer limited protection and usually only cover the structure of the home and major home systems.
Builder warranties only cover your property for a few years, and they do not cover the most common home repairs like plumbing stoppages.
In some states, where the law does not require builders to provide consumers with a warranty, home buyers are on the hook the moment they close on the property. Regardless of the age of your home, home systems and appliances will break.
In a newly constructed home, many of your systems are covered under manufacturer warranties. If you purchase new appliances, they will come with coverage for around 12 months, and some defects may not be covered.
A home warranty protection plan fills in the gaps. It also covers you for things like plumbing stoppages, which builder and manufacturer plans do not. Some plans also include items like free air conditioning filters, pest control, and semi-annual system check-ups.
When you consider what each warranty covers, repair timeframes, costs, extra benefits, and plan options, there is no match for buying your plan from an industry leader. However, there is nothing wrong with purchasing a major appliances plan while your home systems still have protection and upgrading to a combo plan later.
Top Home Warranties For Newly Constructed Homes Reviewed
Now that you know how a home buyers warranty helps broaden your home protection, are you wondering which companies offer the best home warranty for new constructions? Take a look at our list of the top home warranties for your newly-built home.
1. Choice Home Warranty
Choice Home Warranty offers comprehensive plans at affordable rates. Choice has been offering home warranties for the past ten years. It has an extensive network of qualified service professionals across the continental United States, and Choice Home Warranty (CHW) is our top pick for your home warranty needs. Choice has been in the home warranty business for more than ten years, and the coverage options are affordable and comprehensive.
CHW has two plans with coverage starting at $36.17 per month. The Basic Plan includes more than 15 home components, including your heating system.
If you want to cover additional items like your air conditioning system, laundry machines, and refrigerator, you will want to select the Total Plan for $43.85 per month.
- Both plans include your heating system.
- Choice guarantees contractor work for 90 days.
- The Basic Plan covers more than 15 items.
- Some consumers report service delays.
- You may have difficulty with replacements of older appliances.
- The replacement limits are low on some items.
2. American Home Shield
American Home Shield (AHS) is one of the most well-established home warranty companies. It has been in business since the 1970s.
Contractors trust AHS, so it has one of the largest and most qualified service provider networks. Realtors also trust American Home Shield and refer their clients for their home warranty needs.
Recently, American Home Shield changed the plans it offers. The new plan structure is a bit more in line with other providers and includes an Appliances and Systems Plan that each start at $34.99 per month and the Combo Plan starting at $44.99 per month.
The plan pricing changes depending on which deductible you choose. There are three options, $75, $100, $125.
- The service technicians are highly-qualified.
- The payment options are flexible.
- American Home Shield covers undiagnosed pre-existing conditions and older appliances.
- You have to pay more for a lower deductible.
- Some items have low replacement limits.
- AHS only guarantees contractor labor for 30 days.
3. Select Home Warranty
One of the most affordable options is Select Home Warranty. It opened for business in 2012, and since then, consumers report positive experiences with the smaller provider.
You have the option of buying the Bronze Plan (appliances) or Gold Plan (systems) for $35.83 monthly, or you can choose the Platinum Plan (combo) that covers both for just $37.50 per month.
During the first year, when your builder warranty offers the most comprehensive protection, the Bronze Plan is a great way to protect your appliances. After the first year, we suggest the Platinum Plan, which covers your HVAC system, dishwasher, refrigerator, range, cooktop, garbage disposal, clothes washer and dryer, HVAC system, ductwork, electrical, plumbing systems, and more.
- You can save money by paying annually.
- You can buy whole-home protection for $37.50 per month.
- Plans include free limited roof leak protection.
- All claims need to be filed within three days.
- The contractor pool is smaller.
- You may have to wait longer for service in some areas.
4. Total Home Protection
Total Home Protection (THP) opened in 2016, making it the newest provider on our list. Total is not as well-established as some competitors, and the plans tend to be a bit more pricey.
However, Total Home Protection offers an excellent septic system, sump pump, and well pump add-on plan. If your home uses one of these systems, you must purchase protection.
In addition to the excellent add-on coverage, Total offers two combo plans. The Gold Plan is $45.33 each month, and it covers your essential appliances and systems. The Platinum Plan costs $52 per month and includes your clothes washer, clothes dryer, air conditioner, heating system, and other home appliances and systems.
- Total offers exceptional septic system protection.
- Reservice for contractor labor is free for 90 days.
- The $45.33-per-month Gold Plan includes 15 home appliances and systems.
- After the first 30 days, you have to pay a cancellation fee.
- You have to call in service requests within 24 hours.
- The plans are some of the most expensive in the industry.
5. First American Home Warranty
First American Home Warranty is another provider that has been in business since the 1970s. It offers some of the most budget-conscious plans available with coverage starting at just $28 per month.
The Basic Plan includes nearly a dozen of your critical home components. If you want added peace of mind, the Premier Plan for $42.50 adds coverage for your laundry machines, heating system, electrical system, and refrigerator.
The downside to picking First American is that neither plan includes your air conditioner. However, it does offer an excellent add-on option.
- The plans are comprehensive and affordable.
- First American Home Warranty is one of the most established service contract companies.
- The add-on HVAC coverage is excellent.
- Neither combo plan covers your air conditioning system.
- The service fees differ from $75 to $100 depending on the item.
- After the first thirty days, you have to pay a cancellation fee.
Final Thoughts On Home Warranties For New Constructions
Choosing a home warranty for your newly constructed property may seem like an unnecessary expense, especially after you pay for home inspections, closing costs, real estate agent fees, and numerous other home-related expenses. However, it can save you a ton of time and money when a system or appliance malfunctions.
The warranty that comes with your newly constructed home is limited, and the most comprehensive coverage is only available for the first year. After that, only major systems and structural defects are covered.
Purchasing a service contract for your new house ensures that you continue to enjoy the same peace of mind you had during the first year of your builder warranty.
To get started, request free quotes from a few of the best home warranty companies for new constructions. Then, compare the quotes, sample contracts, and home warranty reviews on sites like the Better Business Bureau (BBB).