Product Warranties

3 Months Ended

Mar. 31, 2015

9.	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 the Company’s 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 months ended March 31, 2015 and 2014:

	Three Months Ended March 31,
	2015			2014
Warranty reserve, beginning of period	$	94,060		$	101,507
Provision		9,081			10,260
Payments		(13,398	)		(13,002	)
Warranty reserve, end of period	$	89,743		$	98,765