Ontario Home Warranty: How Does It Work?

Finding and buying the right brand-new home can feel like a never-ending, uphill battle for the average home buyer in Ontario. 

Firstly, you need to save for years or even decades. Then, you have to search tirelessly while hoping that one of your offers gets accepted before you can sign on the dotted line and call a property “yours”.

With this in mind, it’s easy to see how buying a home is rarely a simple or straightforward process. So, once you’ve finalized the purchase, the last thing that you want is for your recent investment to get severely damaged.

If you’re buying a brand-new or recently refurbished house in Ontario, you should familiarize yourself with the Ontario home warranty.

Whether you’ve never heard of the new home warranty or simply need a refresher, you can learn everything that you need to know in the paragraphs below.

What is an Ontario home warranty and why are they important for homeowners?

In layman’s terms, an Ontario home warranty is a third-party contract that is offered by homebuilders and enforced by the provincial government.

If something happens to your home during the covered period (generally the first seven years from the date of possession), your new home warranty can cover the potential losses. This is different from home insurance (more on that later).

Since it was introduced in 1976, the Ontario new home warranty program has helped over two million homeowners across the province, amounting to countless dollars worth of financial aid.

How does the Ontario new home warranty help homeowners?

The Ontario new home warranty program, commonly referred to as Tarion, helps homeowners in a variety of ways, including:

• Prosecuting builders who aren’t certified
• Ensuring builders follow the standards listed in the “Construction Performance Guidelines” (third edition)
• Teaching the public and home buyers about the warranty and their rights
• Conducting research and assessing issues within the Ontario construction industry
• Acting as a third party between homeowners and builders during warranty disputes
• Offering protection for a delayed closing
• Proving deposit protection for home buyers

With this in mind, it’s clear that the Ontario new home warranty is in place to help homeowners and home buyers in Ontario.

What’s covered by a home warranty Ontario?

An Ontario new home warranty typically protects homeowners from the following instances:

• Protection against severe structural defects (seven years’ worth of coverage)
• Deposit insurance
• Protection from postponed occupancy
• Protection against material and workmanship defects (one and two-year warranties are generally available)
• Coverage for common areas in condominiums

If you’re currently dealing with the aforementioned issues, contact your home builder or warranty provider as soon as possible.

*Homeowners and buyers should note that the Ontario new home warranty stays in effect even if the house is sold during the warranty period.*

Is an Ontario new home warranty legally required for builders?

Yes, all home builders or construction companies that work on homes in Ontario need to be registered under Tarion and need to offer home buyers a new home warranty. 

Builders and construction companies that don’t obey these laws can face serious consequences from the Ontario government. The Ontario new home warranty has been legally required since 1976. 

So if you’ve purchased a brand-new or recently refurbished home, the builder is legally required to offer you a warranty.

How to use your Ontario new home warranty

If you happen to notice a structural issue, defect, etc. in your new home, the first thing that you should do is reach out to the company who worked on your home. From there, the builder can help you deal with the issue.

However, if you are unable to get a hold of your home builder, you’ll need to get in contact with your warranty provider. Your warranty provider will act as an objective third party and help you and the builder come to a solution.

What’s the difference between an Ontario new home warranty and home insurance?

Both home insurance and the Ontario new home warranty have one primary thing in common: they’re both in place to help homeowners financially protect themselves from property-related losses. However, this is where the similarities end for the most part.

As mentioned earlier, a home warranty is offered by home builders, whereas a home insurance policy is provided by insurance companies.

In addition, new home warranties only cover the home for (in most cases) a maximum of seven years. In contrast, home insurance protects a property as long as the policyholder pays for coverage.

Lastly, home warranties and home insurance protect homeowners from different events. As mentioned earlier, home warranties generally cover issues related to structural damage, work defects, and other construction-related issues. On the other hand, home insurance financially protects homeowners from sudden, unforeseen events (known risks and perils), like house fires and tornadoes.

With this in mind, it’s easy to see why homeowners can’t just rely on their new home warranty in Ontario — they also need to invest in high-quality home insurance.

If you’re looking for home insurance in Ontario, the first thing that you should do is reach out to a reputable brokerage, like our team at Surex.

Shop for home insurance with Surex and save up to 25%

At Surex, our team of advisors (our preferred term for insurance brokers) wants to help you find and save on high-quality insurance from the best home insurance providers in Canada.

Whether you’re looking for home insurance, car insurance or anything in between, our trusted advisors can help you from start to finish.

Contact us today over the phone or online to get started and receive your quote within ten short minutes!

When you’re speaking with your Surex insurance advisor, don’t forget to ask about the bundling discounts you may be eligible for — bundling more than one policy with the same provider results in massive savings, sometimes as high as 25%!

Do you want to learn more about home insurance in Ontario?

If you want to learn more about the Ontario home protection, the Canadian insurance industry, insurance discounts and various types of coverages, check out the Surex blog.

The Surex blog is full of interesting articles that can help you find and save top-quality coverage in Canada.