There are two distinct classes of home warranty insurance. The first type is an insurance cover, which covers household appliances. This covers most of the appliances such as fridges, microwaves, and water heaters replacement and repair costs. It also covers major wiring systems.
The second type insures a home owner against complications arising from the construction contractor's fault. This protects the owner of a building being constructed from problems arising from breach of contract by the contractor. The contractor has to either be dead or disappear for a person to be compensated for such complications by the insurer.
There are a number of contractor's faults that are covered under this policy. For example, use of substandard material, not finishing the work in the required time or non-completion of the building due to death or disappearance of the constructor. In the event that the contractor is available, he is expected to take responsibility of his misdeeds, therefore, the owner has to sue him rather than seek compensation from the insurer.
Building laws require that a constructor sticks to the specifications of the contract. In addition, new buildings should be constructed using new materials unless the owner has stated otherwise. It is also the duty of the contractor to ensure that the structure is complete and ready to be occupied before the agreed time. Failure to observe any of this is regarded a breach of contract.
Some states requires that this form of insurance be present before the commencing of any construction work. These states have adopted various statues which makes having the warranty licenses a legal requirement, however, in some states, the license is not mandatory. Only companies which are approved by provincial financial institutions commission have the right to issue the insurance covers.
There are some buildings which are exempted from having Home Warranty prior to starting the construction work. These include hotels, dormitories, manufactured homes, float homes, and care facilities. It is not mandatory that such buildings have these covers before construction commences.
The second type insures a home owner against complications arising from the construction contractor's fault. This protects the owner of a building being constructed from problems arising from breach of contract by the contractor. The contractor has to either be dead or disappear for a person to be compensated for such complications by the insurer.
There are a number of contractor's faults that are covered under this policy. For example, use of substandard material, not finishing the work in the required time or non-completion of the building due to death or disappearance of the constructor. In the event that the contractor is available, he is expected to take responsibility of his misdeeds, therefore, the owner has to sue him rather than seek compensation from the insurer.
Building laws require that a constructor sticks to the specifications of the contract. In addition, new buildings should be constructed using new materials unless the owner has stated otherwise. It is also the duty of the contractor to ensure that the structure is complete and ready to be occupied before the agreed time. Failure to observe any of this is regarded a breach of contract.
Some states requires that this form of insurance be present before the commencing of any construction work. These states have adopted various statues which makes having the warranty licenses a legal requirement, however, in some states, the license is not mandatory. Only companies which are approved by provincial financial institutions commission have the right to issue the insurance covers.
There are some buildings which are exempted from having Home Warranty prior to starting the construction work. These include hotels, dormitories, manufactured homes, float homes, and care facilities. It is not mandatory that such buildings have these covers before construction commences.
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