New Home Warranty Program in Alberta

Table Of Contents:

What Is The New Home Warranty Program?

New home warranty is an insurance protection product that protects your home from material, labour and structural defects that might arise after the commencement of warranty. The warranty stays with the home, whether you are the original owner or subsequent buyer and typically lasts for 10 years.

Is New Home Warranty Mandatory?

 Alberta’s New Home Buyer Protection Act stipulates that all new homes must include warranty coverage of one year for materials and labour, two years for delivery and distribution systems, five years for building envelope and 10 years for major structural defects. As you look at homes and get to know the homebuilders in your community, consider the warranty carefully. You want to buy your home from a professional homebuilder with a solid reputation, excellent after-sales service and a third-party warranty provider.

Coverage Prior To Possession :

Pre-Possession Insurance is a combination of Deposit Insurance and Home Completion Insurance. This means in the event of default by a homebuilder, the purchaser’s investment is covered from payment of initial deposit under the purchase agreement and expires upon start of construction to a maximum of $100,000. Please confirm amount with your homebuilder. Home Completion coverage commences upon the start of construction and expires upon commencement of warranty to a maximum of $100,000.

Coverage

1 YEAR Materials and Labour:  Coverage for defects in materials and labour which include items such as flooring, paint and trim. 2 YEAR Delivery and Distribution Systems: Coverage for defects in materials and labour related to delivery and distribution systems including heating, electrical and plumbing systems. 5 YEAR Building Envelope: Coverage for defects in the building envelope, which is defined as the system of components that separate the controlled interior air from the exterior. For example, roof and exterior walls. OPTIONAL Additional Building Envelope: Coverage for defects in the building envelope for an additional two years. Only the homebuilder may opt for this coverage at the time of application. 10 YEAR Structural: Coverage for structural defects such as frame and foundation

Exact cost will vary, depending on the warranty provider, the builder, and the home. As a rule of thumb, new home warranty will add about $2,500 to the cost of an average home. Based on that average, warranty coverage would cost less than one per cent the price of the home, and less than many of the upgrades often made to a home during construction to protect the biggest investment most people make.

A homeowner experiencing an issue with the new home should do the following:

• Get to know your warranty dates to ensure coverage is active for the issue you’re experiencing.
• You may contact your builder directly to discuss the issue and attempt to resolve it. NOTE: Contacting your builder does not mean you’ve made a claim under your warranty policy.
• If you still need to make a claim, contact your warranty provider. Every provider’s process is unique–they will guide you through their specific requirements and procedures.

To learn more, view a one-minute information video about the warranty process.

Be sure to read your warranty policy carefully in order to find out what is covered, including any conditions, exclusions, expiry dates, or claim reporting cut-offs that you need to be aware of.  If you need more information regarding a dispute, please visit the Superintendent of Insurance’s consumer information