Warranty Claims: Look to Insurance Proceeds
Dunmore Homes revealed in its Disclosure Statement that it had significant contingent liabilities, including homeowner warranty obligations. Some of these warranties were insured by Premier Indemnity Co, but homeowners would claim directly against the home builder. There were about 150 homes covered by this kind of warranties. Note, however, that Dunmore Homes owed approximately $700,000 in premiums to Premier. The Disclosure Statement basically stated that claims would receive payment equal to the amount of Warranty Insurance Proceeds received by Dunmore Homes. There was no clear indication as to the percentage of recovery on each warranty claim.
