Gone are the days of business as usual in the remodeling business. With the residential construction market near record lows, home builders are expanding into other activities to help ride out the recession. A member census conducted by the National Association of Home Builders (NAHB) in October 2008 found that 45 percent of builders had diversified into other construction and non-construction projects since the beginning of 2007. Another 20 percent plan to diversify in 2009. Further, the NAHB census found that 32 percent identified remodeling as a secondary activity—a significantly higher share than for any other option.

This increasing competition requires remodelers to offer something more to homeowners. One way to stand out above the crowd is to offer a written, third-party, insurance-backed warranty. Consumer spending is tight. Homeowners are strictly scrutinizing every dollar they spend; they are expecting more for their money. According to NAHB more and more consumers have come to expect written warranties.

A handshake is no longer enough when it comes to spending potentially hundreds or thousands of dollars to remodel, improve or repair what is often a consumer’s most expensive investment—their home. A written warranty can add to a Remodeler’s marketability thereby increasing sales. In addition, the right warranty reduces liability exposure as well as limits administrative time related to homeowner calls upon completion of the project.

Implied warranty laws are in place in most states; however, these laws do not clearly define the builder’s responsibility, and when relied upon in legal disputes these laws tend to favor the homeowner. There is a difference in the types of warranties available. A written warranty, such as the 2-10 HBW Warranty, clearly defines the responsibilities of the remodeler and helps ensure that the homeowner has no misconceptions about the project. The performance guidelines in a warranty such as the 2-10 HBW Warranty can be relied on if there is a dispute, and that dispute will be resolved in arbitration. Further, third-party, insurance-backed, written warranties, such as the 2-10 HBW Warranty, provide additional protection for both the remodeler as well as the homeowner.

2-10 Home Buyers Warranty® (2-10 HBW®) has developed a comprehensive remodeling warranty known as the 2-10 HBW Home Improvement Warranty. The coverage can include 1-year workmanship, 2-year systems, and if relevant for the project, 10-year coverage for qualifying structural defects. Similar to the 2-10 HBW new home warranty, the warranty insurer provides surety coverage for the builder’s workmanship and systems coverage, and insurance-backed coverage for qualifying structural defects.

“The builders’ obligations to their customers (the homeowner) are defined by state law; unfortunately, many builders do not fully understand their liability. Many Builders assume their work will be covered under their general liability policy, which is not always true,” said Joan Riordan, General Counsel for 2-10 Home Buyers Warranty. “Remodeling work is no different than new home construction. Mistakes happen. It is reassuring to the homeowner to know that their remodeler stands behind his work because he provided a 2-10 HBW Home Improvement Warranty.”

Remodelers with the right tools in place will withstand this down market and emerge to a new more professional marketplace. Consumers are more savvy, and as the new construction market remains down Remodelers that are more nimble and flexible will be in a position to take advantage of this opportunity by adopting more professional business practices including offering a third-party, insurance-backed warranty like the Remodeler’s Choice Home Improvement Warranty offered by 2-10 HBW.