Q: Why do you think new home builders, automobile manufacturers, and appliance manufacturer clients all talk so much about their warranties?

Housing and Urban Development (HUD) Home Owner Warranty Programs Provided by Harleysville s Risk Control Department 800-523-6344 ext 8100 www.harleysvillegroup.com/riskcontrol Best Practices Q: Why do you think new home builders, automobile manufacturers, and appliance manufacturer clients all talk so much about their warranties? A: Because your client can sell more products, provide peace of mind through better service and create repeat business / bring in new customers. A Home Warranty is a service contract. There are many home-owner warranty contracts available for new construction. Many developers will purchase a warranty from a company specializing in new construction for the homes they sell. A home owner's warranty will warrant the good working order of the appliances and workmanship of a new home for between one and ten years; for example, appliances might be covered for one year while the roof may be covered for several years. The purchase of a HUD-accepted, insured ten-year home warranty protection plan is required for builders / general contractors of residential construction to be considered for coverage with Harleysville Insurance. For the Home Buyer the home warranty program provides Improved comfort level when purchasing a new home A financial means to pay for major structural problems that may develop over time Another source to take major construction defect issues for resolution and repair For the Home Builder the home warranty program provides An additional selling feature to offer the new home buyer Financial source to pay for expensive construction defect issues that may develop over time Third party administration to manage and settle claims Should there be a major and expensive construction defect issue that develops over time for a particular home buyer, a construction issue that the builder simply cannot resolve to the satisfaction of the home buyer, the claim is generally filed with the home warranty company. The claim is either resolved by the home warranty company or may, at times, be submitted to a binding arbitration process. The home buyer, by agreeing to the home warranty contract, at closing, is required to abide by the binding arbitration decision. A HUD-accepted home warranty program is a first line legal defense for new home builders when dealing with major defective construction issues. Attached is a list of HUD accepted insured ten-year protection plans. An updated list can be found at www.hud.gov/offices/hsg/sfh/ins/hoctenyr.pdf. This information may not address all hazardous conditions at your location LCT 1071 (JL 08/08) Copyright 2008 Harleysville Mutual Insurance Company Page 1 of 7