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.
If you’re looking for a trusted, industry-leading home warranty company, we recommend Choice Home Warranty. They’re a top-rated brand and right now you can take advantage of their current promotions that get you $50 off, plus one free month and free 30-Day cancellation. Get a free online quote or contact a specialist at 929-400-6169 before these deals end. Another great option is American Home Shield which offers $50 off. Get a free quote online or you can call a home warranty specialist directly at 866-464-7521.
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
Choice Home Warranty Review (Best Overall Home Warranty)
Why Do We Like Choice?
Out of all the home warranty companies we reviewed, Choice Home Warranty has the most comprehensive plans, good payout limits, minimal number exclusions, quality customer service, and affordable cost.
Choice has two main home warranty plans. The “Basic Plan” and the more comprehensive “Total Plan” covering 15 home appliances (dishwasher, etc) and systems (duct work, water heater, etc). They also have “Optional Coverage” for add on items most homeowners don’t usually have, which include pools and spas, well pump, sump pump, roof leaks, other extraneous items.
Based on our review, Choice’s “Total” plan covers these items at a more affordable price point than its competitors although has a few more exclusions, which is how they can justify charging a lower monthly payment.
The thing about home warranties is that they are a bit complicated with a lot of moving parts that may confuse most homeowners on what’s covered versus what’s not covered.
A key deciding factor in our review looking for the best home warranty company is finding one with top quality customer service to help customers like you walk through the claims process so you don’t have to worry about nasty surprises when you need service.
That said, Choice has 24 hours a day 7 days a week 365 days a year availability and a 48 hour response time to get a contractor out to your home. Other providers tend to have slower response times and are less communicative about when technicians are assigned to your claim.
Policy On Pre-Existing Issues or Older Units?
Choice covers appliances regardless of age or existing wear and tear, so you don’t need to worry about signing up and not getting covered due to age assuming you’ve properly maintained the item over it’s life.
What’s not covered is if you or someone else breaks the unit regardless of when it happens. All home warranties, regardless of company, won’t cover a unit you break through negligence or misuse (i.e., baby sticks chocolate bar into VCR).
- Good Limits (up to $1,500)
- Minimal Exclusions
- More Affordable
- Only 15 Home Appliances & Systems Covered
American Home Shield Review (Editor’s Choice)
Why Do We Like American Home Shield?
Far and away the most thorough and transparent home warranty company we reviewed is American Home Shield. They are the gold standard. If you spend any amount of time on their website, it’s clear that they are very upfront about what they do cover and don’t cover when compared to their competitors.
In fact, they go out of their way to tell you they cover things their competitors don’t like rust or plumbing stoppages.
They also have the best home warranty coverage with an astounding 21 systems and major appliances including trash compactor, smoke detectors, and clothes washer. They also have the fewest number of exclusions with the highest dollar limit payout amounts ranging from $1,000 – $3,000 per claim.
Think of American Home Shield as the “BMW” or “Mercedes” of home warranty companies. More expensive than Choice, but with better coverage and limits.
Policy On Pre-Existing Issues or Older Units?
Very similar to Choice, American Home Shield covers old systems and appliances that break down due to wear and tear, but they do not cover pre-existing issues or negligence related to the misuse of your appliance or system!
- Highest Payout Limits (up to $3,000)
- Widest Coverage (21 systems and appliances)
- Fewest Exclusions
- Most Expensive
Select Home Warranty Review (Most Affordable)
Why Do We Like Select Home Warranty?
Select Home Warranty made our list as a best budget friendly home warranty option. They have lower limits ranging from $500 – $2,000 per claim but also lower service fee costs and potentially reduced annual premiums as low $325 per year if you opt into multiple year contracts, far below other competitors.
If you opt for their “Platinum Care” they are on-par with other providers in terms of what they actually cover.
Overall, a great budget option for people who want a home warranty but can’t afford Choice or American Home Shield.
Policy On Pre-Existing Issues or Older Units?
Very similar to Choice and American Home Shield, Select covers old systems and appliances that break down due to wear and tear, but they do not cover pre-existing issues or negligence related to the misuse of your appliance or system!
- Most Affordable Service Contracts
- Roof leaks Are Covered In Their Platinum Plan
- Ultra Pushy Sales
- 3 Days To Submit Claim
- Weaker Network Of Contractors
Liberty Home Guard Review
Why Do We Like Liberty Home Guard?
Liberty Home Guard is one of the newer home warranty companies on the market. With Liberty Home Guard, you will be exposed to all of the latest and greatest theories and concepts in the industry. This attention to technology will be seen immediately on their website and when dealing with the brand new customer portal. If you like a streamlined and electronic process for your home warranty policy, Liberty is a great choice.
Liberty Home Guard has only been in the industry for a few years, yet they have grown a network of more than 10,000 certified contractors from around the country. These contractors have to go through a rigorous application to ensure that they are qualified to be making repairs in your home.
Like some of the other home warranty companies on the market, Liberty Home Guard allows you to customize your plan with add ons and additional coverages. When it comes to pricing, Liberty Home Guard will be right in the same ballpark as most other manufacturers. There is some customization of your plan to be able to work within your budget, but a basic plan will start around $49.99 a month.
We like that with Liberty Home Guard, you can use a contractor of your choice if you wish. The reservice fee will not be covered if you choose your contractor, but it is an excellent option if you have people that you trust to do your home repairs.
Policy On Pre-Existing Issues or Older Units?
If you are not moving into a brand new home, you will still get coverage from Liberty Home Guard. After your 30 day waiting period to begin coverage, all working appliances and systems will be covered from that point forward. If you have a broken microwave and you haven’t signed up for converge just yet, you will need to have that fixed before your coverage can start.
- State of the art customer portal system
- Rigorous testing for contractors
- Ability to use your own contractors
- Fair pricing
- Good customer service for a newer company
- Must report your issues within one day of noticing a problem
Total Home Protect Review
Why Do We Like Total Home Protect?
Total Home Warranty made our list as a home warranty with above average protection on more robust systems like septic systems and roof coverage.
Their monthly cost comes out to around ~$45 per month for their basic “Gold” plan, which puts them on the more expensive side of the scale when compared to other top home warranties on our list with better coverage.
Most home warranties do not cover anything related to your roof but Total Home Protect does, which we found to be unique to their offering helping them crack our top list.
Policy On Pre-Existing Issues or Older Units?
Very similar to Choice and AHS, Total Home Protect covers old systems and appliances that break down due to wear and tear, but they do not cover pre-existing issues or negligence related to the misuse of your appliance or system!
- You Can Choose Your Own Technicians
- Roof Coverage
- More Exclusions Than Most Competitors
- The Worst BBB score
- Low Payout Limits ($500)
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).