In fact, the warranty industry pays claims on only about 1 percent of the homes covered by such policies. "They're in the business of collecting fees and not paying claims," says Jack Dorwart, manager of Holladay Group in Lakewood, Colo., which will close about 40 homes this year--all with insurance-backed, 10-year warranties to pacify buyers. "For the types of things a homeowner wants [covered], there's always an excuse [to deny the claim]."  Even those in the industry admit their policies are limited. "Most construction defect lawsuits don't fall under warranty protection," says Wallace "Em" Fluhr, CEO of 2-10 Home Buyers Warranty (HBW) in Atlanta,  Read more...