Dean Stritch of LABC Warranty describes what to look for when choosing a warranty provider for residential and commercial projects
How do you choose a warranty provider? With a range of options on the market, what is the difference, and how do you choose the cover that is right for your development? LABC Warranty provides the following top tips on how to choose.
The cover
Not all structural warranty policies provide the same level of cover. While some differences may be subtle, others can be more dramatic and potentially leave you unprotected in certain situations. The level of excess or financial limits also vary from provider to provider. Obviously the best way to completely understand any insurance policy is to read it in full, but here are some useful questions that you might want to ask at the start to help narrow down your search:
- What is the policy excess?
- Is water ingress excluded from cover?
- What is the financial limit for each house or unit?
- Is there an overall policy limit?
- Does the policy include a defects insurance period (more on this later)?
The insurer
Most structural warranty companies provide insurance policies underwritten by insurers rather than underwriting the policy themselves. This means that any claims will be paid by the insurer backing the policy. Structural warranties are for a 10-year period. Given this length of time it is even more important to ensure that the insurer you choose will continue to trade for the duration of the policy. This may seem straightforward, but how can you know whether an insurer is reliable and secure? One useful indicator is to ask who the insurer is behind the policy and request their financial rating. The stronger the rating, the more likely they are judged to be able to meet their financial obligations, including potential claims.
Level of experience
When you are working with a builder or sub-contractor, do you choose to work with the company with a proven track record, or someone completely new to the industry? We‘re guessing you would go with the more experienced operator, so why would your insurance provider be any different? Providing 10-year structural warranties means that it takes at least 10 years for a provider to have any customers that have been through the entire process. To be sure you are dealing with an experienced company you might want to ask the following:
- How many years have they have been providing structural warranties?
- Are they a member of the Consumer Code for Home Builders?
- Are they accepted by mortgage lenders?
Risk management & technical support
When you are buying an insurance product, it is important to remember that the warranty provider will be working alongside you for the duration of the project. Therefore, you should find out exactly how they will operate on your site(s) and the implications this may have on your projects:
- Do they employ their own surveyors?
- Do they have clear technical standards?
- What technical support can they provide to assist during the project?
Customer service
Just as risk management and technical support is important to the build process, the warranty provider’s customer service will affect your day-to-day experience, including the issuing of your certificates at the end of the project. Ask the provider:
- Will you have a dedicated point of contact or account manager?
- How quickly can you expect a response to your query?
- How do you receive your certificates after completion?
- How will you track and measure site performance (online or paper exercise)?
- Will you be provided with any homeowner feedback as part of the service?
Value
Yes, margins can be tight, but rather than putting cost or price first, it is worth considering what you are getting for your money. Before you make a decision based solely on price, make sure you are happy with the answers provided to the above questions. Remember too the peace of mind a good structural warranty offers and reputational protection.
Working with modern methods of construction
With developers and builders using different methods of construction, not just bricks and mortar, it is worth knowing how your warranty provider works with this type of project. Have a look at their customers’ work and see what kind of projects they are covering. Better still, do they work with an accreditation scheme that allows build products and systems to be pre-approved for warranty cover, with any conditions clearly shown.
Dean Stritch is national sales manager at LABC Warranty
What is a structural warranty and how does it work?
A structural warranty covers latent defects – in other words, issues with the building’s construction that cannot reasonably be foreseen. It is an insurance policy that ensures any major damage caused by structural defects in the design, workmanship or components of a building, are put right in the first 10 years from build completion. Generally, a structural warranty is split into two periods of time:
- Defects Insurance Period – typically the first one or two years of a policy, this period is the time in which the builder is responsible for rectifying any defects deemed to be a failure to comply with the warranty provider’s standards.
- Structural Insurance Period – generally eight years following the Defects Insurance Period during which time the warranty provider is responsible for dealing directly with claims. Providing the claim is valid, the provider should then organise any necessary repair work, or pay for such repairs.