Third-party Home Warranty Insurance

Overview

Home warranty insurance protects new homes in B.C. against construction defects in materials and labour, building envelope and structural defects. It is Canada’s strongest construction-defect insurance.

The Homeowner Protection Act and regulations require that all new homes must be built by a licensed residential builder and covered by home warranty insurance unless they are specifically excluded by the Act or regulations.

Approved Providers

Home warranty insurance providers are regulated by the BC Financial Services Authority (BCFSA). Only home warranty insurance providers approved by the Authority and that meet the requirements of the Homeowner Protection Act can provide home warranty insurance.

The Insurance Council of B.C. regulates insurance brokers that act on behalf of home warranty insurance providers. BC Housing monitors the performance of the home warranty insurance system in accordance with the Act and regulations, but we have no authority to regulate the providers.

Contact one of the approved providers on our list to apply for third-party home warranty insurance.

Working with providers

As a residential builder, you’ll need to contact an authorized home warranty insurance provider or their authorized insurance broker under these circumstances:

  • To obtain acceptance from a home warranty insurance company, an important requirement for getting and keeping a residential builder licence.
  • To arrange for home warranty insurance for each new proposed home (unit) or residential building. As the licensed residential builder, you register the new home(s) online while the warranty insurance company enrols the home(s).
  • To arrange for inspections with the warranty insurance company throughout the new home building process.
  • To notify the warranty insurance company when construction of the new home is complete and of the initial occupancy date. The provider needs these details to initiate the home warranty insurance policy.
  • To remedy defects covered by the home warranty insurance policy.

Consult our working with your warranty provider during and after Construction page for more details, including construction and commencement phases of the project.

Key approval questions

You need acceptance from a warranty insurance provider as part of your licensed residential builder application. The warranty insurance provider may ask you for more information in certain areas before accepting you. These areas could include:

  • Do your financial resources match with your business plan?
  • Is there sufficient business and building expertise, as well as experience, in the company?
  • Does your past conduct show good business practices and that undertakings will be carried out in accordance with all legal requirements?
  • What is your after-sales service plan and capability?

Every time a licensed residential builder proposes to build a new home or project they must get approval for home warranty insurance on the proposed new unit(s). The home warranty insurance company may ask you for more information in certain areas before approving a proposed new home or project for warranty insurance. These areas could include:

  • Financial resources for the construction of the proposed new home(s)
  • Technical expertise and practical experience available
  • Sufficient and appropriate personnel to perform the construction
  • Review of the plans for the proposed new home(s)
     

2-5-10 Coverage

The Act and Regulation set out the minimum standards of home warranty insurance coverage.

All new homes built by licensed residential builders must have 2-5-10 home warranty insurance, the strongest construction defect insurance in Canada. That coverage includes:

  • 2 years on labour and material (some limits apply)
  • 5 years on the building envelope, including water penetration
  • 10 years on the structure of the home

More details can be found in our Regulatory Bulletin 2-5-10 Year Home Warranty Insurance . These summaries are for convenience only. They do not replace or supersede the Act and Regulation. Consult them for more information on:

Exemptions

The most common exemption from the licensing and home warranty insurance requirements is a new home built under an Owner Builder Authorization issued by BC Housing.

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

  1. Manufactured homes, including mobile homes (CSA-Z240) and factory-built homes (CAN/CSA-A277)
  2. Hotels and motels
  3. Dormitories
  4. Care facilities
  5. Floating homes

However, if any of the classes (2, 3, 4 and 5) above are strata-titled, they are deemed to be new homes and require home warranty insurance, licensing and the reconstruction fee (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.

New homes on First Nations lands

Homes built on Treaty First Nations lands are subject to the requirements of the Homeowner Protection Act and Regulations and must be built by a licensed residential builder and have 2-5-10 year home warranty insurance coverage. The Act and Regulations apply to First Nations that have completed the treaty process; where the Treaty is passed into law and implemented.

This is not the case for non-Treaty Lands. Homes built on reserve lands are not required to be built by a licensed residential builder and do not require 2-5-10 year home warranty insurance coverage. First Nations reserve lands are under federal jurisdiction and are not subject to the Act and Regulations. Builders constructing homes on reserve lands may voluntarily become licensed or offer home warranty insurance for the homes that they build. If a new home is voluntarily enrolled in home warranty insurance coverage, the coverage provided must meet the minimum requirements of the Act and Regulations: the same coverage as the mandatory 2-5-10 year home warranty insurance coverage.

Continuation of coverage

You need to enrol a home in home warranty insurance before you can get a building permit and start construction. However, it’s a revocable commitment and doesn’t constitute a home warranty insurance policy until you’ve completed the home and the policy has begun.

There must be continuous coverage by home warranty insurance in order for construction to continue on a legal basis.

For more information on enrolment and continuous coverage, consult our regulatory bulletin, Registering and Enrolling New Homes for Home Warranty Insurance Coverage.

Our regulatory bulletin, De-enrolling Homes from Home Warranty Insurance and the Homeowner Protection Act , explains what happens when a home is de-enrolled from coverage and what your options are to remedy that de-enrolment.