The Following Language Is Added to Section 8 of the Warranty:
The warrantor (us or the insurer, as applicable) has the right and authority to make the decision whether to repair, replace or pay you the reasonable cost of repair or replacement in lieu of performing such repair or replacement. If the warrantor decides to pay you the cost of repair or replacement of a warranty claim, such cash settlement offer will be made in writing and you will be given two weeks to respond. Cash settlement offers over $5,000.00 are subject to an on-site review by a HUD-approved fee inspector (inspection costs will be paid by the warrantor) unless: (1) the cash settlement offer is made pursuant to a binding bid by an independent third party contractor that will accept an award of contract from you pursuant to such bid; or (2) payment is being made in settlement of a legal action; or (3) you are represented by legal counsel. The payment will be made jointly to you and the mortgagee. You are required, if requested, to identify the mortgagee to the party making the payment. If a payment in lieu of repairs is made, your mortgagee may require repairs or a reduction in the mortgage debt. In accordance with HUD and VA regulations, our obligations under this warranty are insured as provided in section 10.1 of the warranty, such that a member of the Zurich North America group insures our obligations if we should default in our warranty obligations under the warranty. You should report any warranty problems which are not promptly resolved by us to PWSC, the administrator of this warranty plan.
If the initial purchase of the home was financed with an FHA or VA mortgage that is still in effect, you are not required to submit disputes seeking coverage under this warranty to the binding arbitration procedure available in the warranty. However, all other disputes are subject to arbitration. If you elect to pursue a dispute seeking coverage under this warranty to a final judicial resolution, then such election will bar you from pursuing the same dispute against this warranty through the binding arbitration procedure provided herein.
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