It has been more than a year since the State of Virginia placed Home Owner’s Warrranty Corp. under receivership after regulators concluded the company faced a $45 million capital shortfall. Since then, the company, which operated in all 50 states, hasn’t been permitted to sell any new policies. Approximately 1.7 million structures have HOW 10-year warranties, purchased through more than 7,000 builders.
HOW began writing warranties in the early 1970s and came to dominate the industry, accounting for almost 50 percent of all policies. The policies, which typically covered systems defects for two and structural defects for 10, became a standard adopted by many others.
Earlier this year HOW, in its receivership status, began making payments on the 1,500 to 2,000 outstanding claims, but only at 40 cents on the dollar. Special deputy receiver Patrick Cantilo said that figure may go up in the future.
While the state is trying to develop a rehabilitation plan for HOW, Cantillo said “it is highly unlikely it will continue to do business like before.”
Homeowners with HOW policies who have claims or questions are asked to call 1-800-433-7657 or write to Receivership Claims, PO Box 152087, Irving, Texas, 75015.
