Legal Definitions - HOW

HOW stands for HOME OWNERS WARRANTY.

A Home Owners Warranty (HOW) is a type of insurance or guarantee provided to purchasers of newly constructed homes. It protects the homeowner against certain defects in materials, workmanship, and structural components that may arise after the home is completed and occupied. These warranties typically cover different aspects of the home for varying periods, such as one year for general workmanship and materials, two years for major systems (like plumbing or electrical), and up to ten years for significant structural defects.

• Example 1: Foundation Issues in a New Build

  A family purchases a newly constructed house. Eight months after moving in, they notice a significant crack appearing in the basement foundation wall, indicating a potential structural defect. The family contacts the warranty provider under their Home Owners Warranty. The HOW policy, which typically includes coverage for major structural elements for several years, would likely cover the inspection, assessment, and necessary repairs to the foundation, protecting the homeowners from substantial repair costs.

• Example 2: HVAC System Failure

  Six months after closing on their brand-new condominium, a homeowner discovers that the heating, ventilation, and air conditioning (HVAC) system has completely stopped working. Since the condo is new, the homeowner refers to their Home Owners Warranty. Many HOW policies include coverage for major mechanical systems for the first one to two years. The warranty would facilitate the repair or replacement of the faulty HVAC unit, ensuring the homeowner doesn't bear the full expense of a new system so soon after purchase.

• Example 3: Leaky Roof from Defective Installation

  Two years after moving into their custom-built home, a homeowner discovers a persistent leak in the ceiling during a heavy rainstorm. Upon inspection, it's determined that the leak is due to improperly installed flashing around a skylight, a defect in workmanship. The homeowner can file a claim under their Home Owners Warranty. While general workmanship coverage might be for one year, some HOW policies extend coverage for specific components like roofing or water penetration for longer periods, potentially covering the cost of fixing the flashing and repairing any water damage.