Home Warranty Insurance

2007/11/13 Originally published in the Vernon Morning Star.

Since July 1, 1999 all new homes in this province have mandatory third party home warranty insurance. The minimum standards are known as 2-5-10. This means two years on labour and materials, five years on the building envelope (building exterior), including water penetration, and ten years on structure. The two year warranty on labour and materials has a further breakdown. The 24 month warranty applies only to defects in the plumbing heating, heating ventilation, air conditioning delivery and distribution systems. A basic 12 month warranty applies to the balance of labour and materials. Interesting that the equivalent basic coverage for strata is 15 months.

All builders, with the exception of owner builders, are required to be licensed builders if they intend to build houses in the Province of B.C. as a further protection for buyers.

Not just any insurance company can provide home warranty insurance. The Homeowner Protection Act requires that the insurance companies must have the approval of the Financial Institutions Commission. They also must meet the requirements of the Homeowner Protection Office.

The 2-5-10 year period commences on the date of the final occupancy permit or the date the home is first occupied, whichever comes first. In the case of strata homes and speculatively built homes the commencement date is the earlier of the first occupancy date or the day the title is put in the first buyers' name.

Homeowner Protection Act has limits on the amount of coverage required to be provided. Houses have a maximum coverage claim limit of $200,000. Strata properties and common property in strata developments have a maximum coverage of $100,000 times the number of units in the building / development. There is a cap of $2.5 M per building.

Damage caused by factors that aren't caused by bad workmanship, materials, etc. such as insect and rodent infestations don't qualify for payment by Home Warranty Insurance.

For more detailed information on the Homeowner Protection Act regulations, the license of builders and the rules referring to Owner Built homes exemptions visit www.hpo.bc.ca or call toll free 1-800-407-7757.

Jane Field works with RE/MAX Vernon. Jane has over 30 years experience in the Real Estate business. To suggest topics for future articles or to ask Jane questions, email her or call 503-3755.

RE/MAX Vernon | 250.503.3755 | Toll free 1.888.503.3755 | 5603 - 27 ST | Vernon | BC | V1T 8Z5 | Canada

© Jane Field Group | All rights reserved.
Logo's are copyright and trademark of their respective companies.