Guide to New Home Warranties

Bob Bostock's home warranty saved him tens of thousands of dollars.

Three years after moving in to his Wildwood, N.J. condominium, Bostock noticed problems with the condo's deck, including mold and mushrooms growing from the boards. Before calling the home warranty company, he called the builder, who came over to inspect. "He said he pulled everything and there was nothing wrong with it," Bostock remembers.

Two years later, problems snowballed with Bostock's deck, as well as three others in the neighborhood. The condominium's association board banded together to insist that they be fixed. Under Bostock's original new-home warranty, workmanship on the condo was covered completely for the first two years and structural or engineering problems were covered for up to 10 years. The builder argued that the deck issues no longer were covered, but the original architect examined the problem and determined the problem was structural.

Bostock and his neighbors pursued a claim with their warranty company; the decks eventually were repaired at a cost of $25,000 each.

A new-home warranty can offer peace of mind for homeowners, guaranteeing that if something goes wrong in the early stages of a home's life, it will be covered. Most builders include a home warranty as a benefit for buying their product, and in many states, builders and developers are required by law to provide home warranties.