Product Warranties

9 Months Ended

Sep. 30, 2011

Product Warranties [Abstract]

Product Warranties

8. Product Warranties

The Company establishes warranty and product liability reserves (“warranty reserve”) to provide for estimated future expenses as a result of construction and product defects, product recalls and litigation incidental to NVR’s homebuilding business. Liability estimates are determined based on management’s judgment, considering such factors as historical experience, the likely current cost of corrective action, manufacturers’ and subcontractors’ participation in sharing the cost of corrective action, consultations with third party experts such as engineers, and discussions with our general counsel and outside counsel retained to handle specific product liability cases. The following table reflects the changes in the Company’s warranty reserve during the three and nine months ended September 30, 2011 and 2010:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Warranty reserve, beginning of period	$	62,804		$	70,181		$	69,787		$	64,417
Provision		11,474			6,636			23,247			29,310
Payments		(11,110	)		(9,454	)		(29,866	)		(26,364	)
Warranty reserve, end of period	$	63,168		$	67,363		$	63,168		$	67,363