Warranties vs. Insurance

Unfortunately, construction and structural defects can—and do—happen.  When crafting your risk management plan, it’s important to understand the differences between warranties and insurance and what they cover so you can make sure you are fully protected.

There is often a misconception that insurance covers construction and structural defects, which is untrue.  There is also a misconception that warranties and insurance are an either/or proposition; however, the reality is that they are complementary—not competitive—products.

Warranties cover the repair or replacement of construction defects in workmanship/materials, delivery portions of systems (wiring, piping, and ductwork), and structural components of a home.  Insurance covers the medical and legal costs related to construction defect claims that involve bodily injury or property damage.

When building the American dream, make sure you are fully covered on both fronts so you have complete protection against any risk.