At a minimum, home warranty insurance coverage includes:

2 years on labour and materials (some limits apply)

5 years on the building envelope, including water penetration

10 years on the structure of the home

The two-year labour and materials coverage covers any defect in labour and materials for:

12 months on detached homes and on non-common property in strata units (including fee simple homes)

15 months on the common property of strata buildings

24 months on all new buildings for defects when related to delivery and distribution systems; defects related to the exterior cladding, caulking, windows or doors that may lead to detachment or material damage to the new home; coverage for violations of the Building Code that constitute a health or safety risk or is likely to result in damage to the new home; and defects which render the home unfit to live in.

Minimum coverage for third-party home warranty insurance is set by legislation. As a minimum, homes built by Licensed Residential Builders must have 2-5-10 Year Home Warranty Insurance. Some new homes have warranty insurance coverage that exceeds the minimum requirement. You should carefully review your home warranty insurance policy documents which will provide specific details on the home warranty insurance coverage on your home.

The warranty is attached to the home, not to the owner of the home, and remains in effect upon the re-sale of the home until the coverage expires.

Strata-titled homes have two policies of home warranty insurance: one on the home and the other on the common property. Sometimes when the coverage of a new strata-titled home starts, the coverage on the related common property has already started — or expired. Coverage on the common property of strata-titled buildings starts when the first unit in the building is occupied or sold.

The Act and Regulation also exempt the following classes of new homes from the requirements for home warranty insurance, registration fees, reconstruction fees and builder licensing:

- Manufactured homes, including mobile homes (CSA-Z240) and factory-built homes (CAN/CSA-A277)

- Hotels and motels

- Dormitories

- Care facilities

- Floating homes

However, if any of the above, with the exception of manufactured homes, are strata-titled, they are deemed to be new homes and require home warranty insurance, registration fees and reconstruction fees (where geographically applicable).

The Act and Regulation exempt the following classes of “new homes” from the requirement for licensing, home warranty insurance, registration fees and reconstruction fees:

- Multi-unit buildings owned under a single title and constructed for rental purposes

- Multi-unit buildings that are strata-titled, but held under single ownership and constructed for rental purposes

- Three or more dwelling units built for rental purposes and owned under a single legal title

In these cases, the owner must provide a restrictive covenant that is registered on the title restricting the sale of any dwelling unit for a 10-year period. More information can be found in the Rental Exemption section of our website.

Exclusions

The Act and Regulations say what the home warranty insurance companies can exclude from their policies.

General exclusions can include:

- Landscaping

- Non-residential detached structures (parking structures, recreational and amenity facilities in multi-unit buildings are covered)

- Commercial use areas

- Roads, curbs and lanes (driveways are covered)

- Site grading and surface drainage

- The operation of municipal services

- Septic tanks and fields

- Water quality and quantity

Defect related exclusions can include:

- Normal wear and tear

- Normal shrinkage of materials from construction

- Use of new home for non-residential purposes

- Labour, materials and design supplied by the owner

- Damage caused by anyone other than the residential builder

- Damage caused by insects or rodents

- Failure of an owner to prevent or minimize damage

- Acts of nature