Compare Home Warranty Options in Ohio
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What Is a Builder Warranty and How Does It Work?
A builder warranty is a guarantee that comes included with your new home purchase — no extra cost, no enrollment required. It protects you against defects in the construction itself: faulty workmanship, substandard materials, and failures in the home's major systems. The coverage is structured in tiers, each with its own time limit, commonly referred to as the 1-2-10 model.
The Standard 1-2-10 Builder Warranty Breakdown
| Coverage Tier | Duration | What It Covers |
|---|---|---|
| Workmanship & Materials | 1 Year | Drywall, paint, trim, doors, windows, flooring, roofing materials, improper installations |
| Systems & Distribution | 2 Years | HVAC, plumbing (pipes, drains, vents), electrical wiring, garage door openers, ductwork |
| Major Structural Defects | 10 Years | Foundation, load-bearing walls, beams, girders, floor systems, roof framing, columns, footings |
This tiered structure means your broadest coverage — the stuff you see every day — expires first. By year two, only your built-in systems remain protected. By year three, you're down to structural-only coverage until year ten.
Does a Builder Warranty Transfer If You Sell?
Transferability depends entirely on the builder's specific warranty contract — it is not automatic. Some builders allow the one-year and even two-year warranty to transfer to a subsequent owner. Others limit coverage strictly to the original purchaser. If your warranty is transferable, the process typically involves:
- Contacting the builder or warranty provider before closing
- Completing a formal transfer form (sometimes called a "Successive Homeowner Transfer and Acceptance" form)
- Providing proof of sale documentation
- Paying any applicable transfer fee
A transferable builder warranty can meaningfully boost resale value, so it's worth understanding your specific terms from day one. If you're unsure, review your warranty booklet or consult a construction defect attorney. For more on how warranties factor into home sales, see our guide on home warranties when buying a house.
Home Warranty vs Builder Warranty: The Core Differences
While a builder warranty protects against construction defects, a home warranty is an optional service contract you purchase separately to cover breakdowns from everyday use. These two products serve completely different purposes — and understanding that distinction is the key to avoiding costly coverage gaps.
What a Home Warranty Actually Covers
A home warranty plan typically covers repair or replacement costs for:
- Major appliances: Refrigerator, oven/range, dishwasher, built-in microwave, garbage disposal, washer and dryer
- Home systems: Heating, air conditioning, plumbing, electrical, water heater, ductwork, garage door opener
Basic plans focus on either systems or appliances. Comprehensive plans bundle both and may include add-ons like pools, septic systems, or roof leak repair. Most plans carry a $75–$150 service fee per claim, with annual premiums averaging $350–$900 depending on coverage scope and provider.
Learn more about home warranties vs home insurance to understand how these products layer together for complete home protection.
What's NOT Covered by Either Warranty
Knowing the gaps is just as important as knowing what's covered. Both builder warranties and home warranties have significant exclusions that can leave homeowners with unexpected out-of-pocket costs.
Builder Warranty Exclusions
| What's Excluded | Why |
|---|---|
| Normal wear and tear or settling | Considered expected over time |
| Appliances (refrigerator, range, etc.) | Covered separately by manufacturer warranty |
| Owner-caused damage or alterations | Builder isn't responsible for post-purchase changes |
| Acts of God (storms, floods, earthquakes) | Outside the builder's control |
| Cosmetic issues (small cracks, minor paint issues) | Below the threshold of a defect |
Home Warranty Exclusions
| What's Excluded | Why |
|---|---|
| Pre-existing conditions | Issues present before coverage begins |
| Improper maintenance or neglect | Owner responsibility |
| Rust, corrosion, or environmental damage | Not a mechanical failure |
| Code upgrade requirements | Regulatory costs not covered |
| Non-built-in items or accessories | Must be a permanent fixture |
Neither type of warranty covers damage from floods, earthquakes, or pests — that falls under homeowners insurance. Understanding the full picture helps you avoid paying twice for overlapping coverage or going unprotected in key areas.
Transitioning From Builder Warranty to Home Warranty
The most dangerous period in a new construction home's life is right after the first year expires. That's when your broadest builder coverage disappears — and if you haven't lined up a home warranty, you're fully exposed on workmanship-related issues and appliance breakdowns.
Your New Construction Coverage Timeline
| Year | Active Coverage |
|---|---|
| Year 1 | Builder warranty: workmanship, materials, systems, structure |
| Year 2 | Builder warranty: systems (HVAC, plumbing, electrical) + structural only |
| Years 3–10 | Builder warranty: structural defects only |
| Year 10+ | No builder coverage — home warranty is your primary protection |
When to Buy a Home Warranty on a New Build
The ideal time to purchase a home warranty is 1 to 2 months before your one-year builder warranty expires. Here's why:
- Most home warranties have a 30-day waiting period before coverage activates
- Purchasing too late can leave a gap where nothing is covered
- Buying too early is fine — coverage stacks with your builder warranty on items not covered by the builder (like appliances)
For first-time buyers especially, adding a home warranty early makes strong financial sense. Explore our home warranty guide for first-time buyers for more detail on what to look for and when it's worth the cost.
If you want to understand how home warranties differ from extended warranties that come with individual appliances, see our breakdown of home warranty vs extended warranty.
Frequently Asked Questions
What is the difference between a builder warranty and a home warranty?
A builder warranty is included with your new home purchase and covers defects in workmanship, materials, systems, and structural components for defined periods (typically 1, 2, and 10 years). A home warranty is a separate, optional annual service contract that covers the repair or replacement of home systems and appliances due to normal wear and tear. Builder warranties protect against construction failures; home warranties protect against breakdowns from everyday use. They are complementary products, not substitutes for each other.
Does a builder warranty cover appliances in a new home?
No. Builder warranties specifically exclude appliances such as refrigerators, ovens, dishwashers, and washers/dryers because those items are covered by the manufacturer's own warranty (typically one year). Once the manufacturer warranty expires, appliances are no longer protected unless you have purchased a separate home warranty that includes appliance coverage. This is one of the most common and costly coverage gaps for new construction buyers to overlook.
When should I buy a home warranty if I have a builder warranty?
You should purchase a home warranty 1 to 2 months before your one-year builder warranty expires. Most home warranty providers have a 30-day waiting period before coverage activates, so timing your purchase in advance ensures there's no gap. You can also buy a home warranty on the day you close — it will cover appliances immediately and then provide ongoing protection as each tier of your builder warranty expires.
Can I transfer my builder warranty to a new owner if I sell my home?
It depends on the specific builder and warranty terms. Some builders allow one-year and two-year coverage to transfer to a subsequent buyer, while others limit coverage to the original purchaser only. If your warranty is transferable, you'll typically need to notify the warranty provider, complete a transfer form, provide proof of sale, and possibly pay a transfer fee. A transferable builder warranty is a valuable selling point and can increase buyer confidence.
What happens if my builder goes out of business before my warranty expires?
If your builder goes out of business, any express warranty tied directly to the builder may become unenforceable. However, if your builder enrolled in a third-party structural warranty program (which some builders do), that coverage may still be valid through the third-party insurer. Additionally, many states have construction defect laws that provide implied warranty protections that exist independently of the builder's solvency. Always review whether your warranty is backed by a third-party insurer for this reason.