New- home warranty can keep investment on solid footing

New homes are rarely perfect.

Houses are giant puzzles with hundreds of parts, manufactured at different locations and carried to the building site. And try as they might to put together a flawless product, builders and their numerous subcontractors don't always get things right.

Luckily, buyers are more likely to have to deal with cosmetic defects than out-and-out structural failures. Scratched refrigerators, broken bathroom tiles and faulty electrical outlets are far more prevalent than badly cracked foundations or sagging roofs.

But structural defects do occur. According to recently released data from 2-10 Home Buyers Warranty, owners of new homes are as likely to experience major structural damage big cracks in the walls, windows and doors jammed shut, or buckled floors as they are a major fire.

This isn't to warn buyers off new construction. Previous research has found that just 1 in 20 houses will sustain a major structural hit over its lifetime. But 1 in every 4 will experience "some" structural distress.

Based on his review of more than 10,000 structural claims over a 32-year period, Walt Keaveny, chief risk manager of the Denver warranty company, says structural problems can occur from day one. But most claims are reported four to seven years after initial occupancy.

Total losses are not common, but claims can be expensive. According to Keaveny's analysis, it costs $42,000 on average to investigate and repair a structural claim.

With this in mind, here's how this warranty company's chief management expert says home buyers can best protect themselves from such catastrophes:

Deal only with builders who offer an insurance-backed new-home warranty from a reputable company. That may sound self-serving. After all, 2-10 HBW is the country's oldest and largest new-home warranty company. But it is wise advice. A 10-year warranty against structural defects is a must, especially in areas of expansive soil roughly in half the country.

Most warranty companies underwrite builders to make sure they are qualified, which is another reason over and above the homeowners insurance protection to have a warranty. And with an insured warranty, if your builder refuses to repair your house or goes out of business, you will be covered.

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New- home warranty can keep investment on solid footing