| Home Warranty Insurance
New homes built in British Columbia are covered by the
strongest home warranty insurance protection in the country.
Private sector home warranty insurance companies offer
these warranties based on the requirements and conditions established by government and
coordinated through the HPO.
The Homeowner Protection Act requires all home
warranty insurance companies to be authorized under the Financial Institutions Act to
carry out home warranty insurance business, as such home warranty insurance companies fall
under the jurisdiction of the Financial Institutions Commission (FICom).
Pre-qualifying for home warranty insurance is required
as a condition of the HPO Residential Builder Licence and renewal. This helps to ensure
that the builder has met certain business and financial tests that satisfy the risk
management requirements of the insurance industry.
From time to time the HPO may review the risk profile
reports of residential builders to satisfy itself that the insurer's assessment meets the
requirements of the HPO.
Standards of
Coverage
The regulations set out the minimum standards of home
warranty insurance coverage as follows:
2 years for labour and materials
- For other than common property, in the first 12 months
any defect or violation of the building code *
- For strata common property, in the first 15 months any
defects or violation of the building code *
- For the remainder of the first 24 months, major systems,
detachment of or material damage to exterior materials or violation of the building code *
* violation of the building code must constitute an
unreasonable health risk or material damage.
5 years for the building envelope
Defects in the building envelope including those that
permit unintended water penetration such that it causes or is likely to cause material
damage.
10 years for structural defects
Material and labour defects that result in the failure
of a load bearing part of the home or any defects materially and adversely affecting use.
Commencement
Dates and Limits
For non-strata homes built under contracts with a
land-owner, home warranty insurance commences on earliest of the actual date of occupancy,
the date of any occupancy permit, and the date that the home is completed and ready for
occupancy and is limited to the lessor of the purchase price paid by the owner and
$200,000.
For non-strata homes built under a sales agreement, the
home warranty insurance commences on the earliest of the date of actual occupancy and the
date of transfer of title - and is limited to the lessor of the purchase price paid by the
owner and $200,000.
It should be noted that for strata projects there are
essentially two coverages, one for each strata unit owner covering the strata unit, and a
distinctly separate warranty issued to the strata council for the common property.
For strata units, the home warranty insurance commences
on the earliest of the date of actual occupancy and the date of transfer of title, and is
limited to the purchase price paid by the owner and $100,000. For the common property, the
home warranty insurance commences on the date that home warranty insurance commences on
the first unit and is limited to the lessor of the total original contract price for the
building, $100,000 time the number of units, and $2,500,000.x
Obtaining
Insurance
Residential builders will have two occasions when they
will have to contact their home warranty insurance company.
- First, to obtain a letter of acceptance from your home
warranty insurance company. This letter is a requirement of licensing.
- Second, to purchase home warranty insurance for each new
home (unit) or project to be built.
Acceptance by a Home Warranty Insurance Company
Home warranty insurance companies may make inquiries
about applicants in order to approve them for future home warranty insurance. As a
guideline to home warranty insurance companies and residential builder applicants, the
regulations set out the type of inquiries that a home warranty insurance company may wish
to make before approving a builder for home warranty insurance. The areas considered
include:
- Do financial resources match with the business plan?
- Is there sufficient business and building expertise as
well as experience in the company?
- Does the past conduct of the applicant indicate a
potential for future problems?
- What is the applicant's after-sales service plan and
capability?
Home
Warranty Insurance Companies
The following home warranty insurance companies have
been authorized by Financial Institutions Commission (FICom):
- COMMONWEALTH INSURANCE represented by
Willis Canada Ltd. * +
1500 - 1095 West Pender Street
Vancouver BC V6E 2M6
(604) 683-6831
1-800-665-5252
Web site: www.williswarranty.com
- KINGSWAY INSURANCE represented by
Residential Warranty Insurance Services Ltd * +
Gordon Garritty
111, 7455 - 132 Street
Surrey, BC V3W 1J8
(604) 599-4740
1-800-238-3493
Web site: www.reswar.com
- LONDON GUARANTEE Insurance Company *+
Ed Tsumura
2500 - 650 West Georgia Street
Vancouver BC V6B 4N7
(604) 682-3095
1-800-555-9431
Web site: www.londonguarantee.com
- ROYAL & SUNALLIANCE represented by
Wylie-Crump Limited o/a the Marathon Warranty Corporation * +
Robert Boyd / Art Doyle
105 - 900 West Georgia Street
Vancouver BC V6C 2W6
(604) 687-8888
1-888-315-6388
Web site: www.wyliecrump.com
- ROYAL & SUNALLIANCE represented by
National Home Warranty Programs *
Jim Morris
802 - 700 West Pender Street
Vancouver BC V6C 1G8
(604) 608-6678
1-888-243-8807
Web site: www.nationalhomewarranty.com
* indicates the companies that offer
home warranty insurance for new residential construction.
+ indicates the companies that offer
home warranty insurance for buildng envelope renovation.
Disputes
1. Notice to Mediate process - for
residential construction disputes filed in the Supreme Court
Regulations introducing a Notice to Mediate process for
parties involved in residential construction disputes were introduced in May 1999.
The process provides parties to residential construction disputes with an effective and
less costly dispute resolution process.
The Notice to Mediate process can be used in any Supreme
Court action involving a residential construction dispute, no matter when the action was
commenced. However, delivery of the Notice to Mediate must take place no later than
180 days before the trail date.
Any party to a Supreme Court action involving a
residential construction dispute can initiate mediation by delivering a Notice to Mediate
form to every other party to the action and the Dispute Resolution Office in the Ministry
of Attorney General.
Copies of the Notice to Mediate (Residential
Construction) Regulations enacted by the Homeowner Protection Act can be obtained
by contacting Crown Publications at phone (250) 386-4636; fax (250) 386-0221 or on this website.
Costs of the mediation are paid for equally by all
participants unless other arrangements are agreed to by all parties.
For more information contact the Dispute Resolution
Office of the Ministry of Attorney General at phone: (250) 387-6888; website: http://www.ag.gov.bc.ca or the HPO.
2. Homeowner Protection Act
regulations
The Regulations provide for a mediation process to
resolve disputes that might arise between an owner and a home warranty insurance company.
Mediation is at the sole discretion of the owner, and the home warranty insurance
company must participate if properly notified by the owner. Both the owner and the
home warranty insurance company may invite any person that may be liable for for disputed
matter.
Registration of New Homes
& HPO Registration Forms
Last Updated: February 22, 2002 |
