If you’re in the market for a newer home, you’ll likely be protected by home warranty insurance – or what is commonly referred to as 2-5-10 coverage. With a few exemptions, all new homes in B.C. offered for sale or under a construction contract with an owner are covered by this warranty.
The “2-5-10” refers to the extent of the coverage – here’s how it breaks down.
Two years: materials and labour (some limits may apply)
- Coverage for 12 months in all new homes and individual strata lots, and 15 months for common property of strata corporations for any defect in materials and labour or violation of the Building Code
- Coverage for 24 months for all new homes, including common property of strata corporations, for defects in materials and labour for the electrical, plumbing, heating, ventilation and air conditioning delivery systems, and exterior cladding, caulking, windows and doors that may lead to detachment or material damage to the home. This coverage also applies for any defect which causes the new home to be unfit for habitation and violation of the Building Code
Five years: building envelope
- Covers defects in the building envelope, including a defect that permits unintended water penetration such that it causes, or is likely to cause, material damage to the new home
- Building envelope includes the components that separate the indoors from the outdoors, such as exterior walls, foundation, roof, windows and doors
Ten years: building structural defects
- Covers defects in materials and labour that cause the failure of a load-bearing part of the home, and any defect that causes structural damage and affects the use of the home for residential occupancy
For more details, read the policy carefully and download the Guide to Home Warranty Insurance in British Columbia free from www.hpo.bc.ca. Homeowners can check the Residential Construction Performance Guide to see whether their possible construction defect is covered under home warranty insurance and how warranty providers may evaluate claims on new homes.