Home Warranties for Older Homes
If you’re buying an older home, the topic of a home warranty will come up at some point. The seller may offer you a free year, or you could receive some offers in the mail. These warranties can be used for any home, old or new, and differ from home insurance policies.
A home insurance policy covers your home in an emergency — such as fires or floods. An old home warranty protects your home’s appliances – the machines that run the home – such as the HVAC (furnace) system, plumbing, or electrical systems. The best warranty for older homes should have extensive coverage, low premiums, and clear outlines about maintaining the warranties.
As for when to buy a home warranty, policies can begin whenever you like. You don’t have to purchase the warranty as your home closes. That can be stressful, and you may want to shop around. Though this is a great idea, it’s helpful to begin budgeting for potential repairs immediately. As a home warranty covers those repairs, they’re of more use sooner than later.
Home Warranty Coverage for Older homes
It’s essential to understand what a home warranty for older homes is and isn’t. There are a lot of different terms that all sound similar, and they’re essential to keep straight. Many confuse these with homeowner’s insurance, but both vary in coverage.
Homeowner’s insurance protects your home from disasters. If a tree falls onto your home or fire and smoke damages it, this falls under house insurance. This insurance even protects you against theft. If you have a pipe burst, homeowner’s insurance will fix the flood’s damage, but they don’t cover the cost of the pipe itself. That job falls to you as the homeowner. An old home warranty covers the major systems within the home, should they fail. If that pipe bursts, the warranty will cover the pipe.
In essence, a home insurance policy safeguards against disasters that might happen, while a warranty focuses on aging systems in the home that will eventually break down. Examples are the electrical, plumbing, and HVAC, as well as the major appliances — including the fridge, dishwasher, washing machine, and dryer.
With a home warranty, you pay a call fee if something breaks down to have a technician come to your home. They inspect the cause, and if the issue is due to wear and tear (and you’ve maintained your appliances properly), they’ll repair or replace the machine. The call fee, which can have a few different names, but all work the same, is around $100 and set with the warranty policy you purchase. You have to pay the call fee for each type of contractor you need (for example, an electrician and a plumber). Beyond that, you’re covered for everything else.
A home insurance policy is mandatory for all homeowners. The warranty is not, though many would highly recommend it. Repairs are necessary for home ownership — it’s just a matter of when they’ll crop up. It’s unrealistic to believe that your appliances will wait until you’re flush with extra cash and ready for them to break down. They’re going to go, often when life is busy. This logic is why a home warranty is so important. You can’t truly know how much attention the previous owners put into maintaining their appliances. Maybe they were diligent, but they also might’ve cut every corner possible to save a few bucks.
A home warranty helps you easily budget for these sudden repairs. You agree to the cost upfront, and with most companies, pick a plan that’s right for you. You’ll already know the call fee if something happens, and the rest is covered. Each month, you’re putting money into the warranty and can consider that your emergency repair fund. Even basic appliances can cost a few thousand dollars, which isn’t exactly money most people are sitting on casually. There’s no limit to how many times you can engage your home warranty, so if you’re having a terrible month, the warranty will keep you covered.
It’s important also to note the distinction between a builder’s warranty on a new home and these home warranties. If you’re buying a new home, you’ll receive what’s called a builder’s warranty with it. The construction company gives this per state laws and may cover the entire home for the first 12 months after its construction – though it also may not. It depends on the warranty specifics. A separate home warranty would ensure you’re fully covered in an emergency.
You can extend your home warranty past a year if you choose to, which is usually a good idea. It’s like living in an apartment in some ways – if something breaks down, you can call maintenance to come and fix it. The difference is you’re choosing the company that manages their maintenance guys. Many people love their home warranty for the peace of mind it gives. Finding a contractor is stressful, and it can affect many aspects of life when things are falling apart. Skip all that stress, and allow the home warranty company to deal with life’s disasters.
You can usually cancel anytime if you have second thoughts. If you have the warranty and nothing goes wrong, you can think of it as saving money for a rainy day. If you don’t already have one, consider a home warranty; buying a house is stressful enough without the fear of something breaking down immediately after closing.
Older homes need home warranties
The older the home, the older the appliances tend to be. Annual maintenance will ward off any potential breakdowns as long as possible, but at some point, something always goes wrong — hence, the home warranty. Rather than pay for the fix, you pay your monthly premiums and the call fee when you require a repairman.
The average cost for most reputable home warranties is around $600 annually. The home warranties cover many home systems and appliances, including electrical, plumbing, HVAC, and a wide assortment of appliances. So is it worth it?
The average contractor costs $40 – $70 per hour, depending on the job and the type of contractor you need. If your roof leaks, you’ll need to replace a few shingles (and fix the water damage), which isn’t cheap. The shingles alone may run as high as $50 each. You’re already at a minimum of $70 on the cheap side. But the average call fee for a home warranty is between $75 to $100, so even at the cheapest rate, you’re close in this example. But that’s only assuming it will take the contractor an hour. Any longer than that, and you’ve already made up for the cost of the call.
If a pipe leaks, the cost to fix it is around $500 on average, but that depends on the type of pipe and its location. Like any issue, some factors can alter the cost for the worst. HVAC systems, on average, can cost $350, with $600 being the higher end of that spectrum. If systems break down even once, you’ve already justified your costs.
Your appliances aren’t much cheaper. While you might get lucky depending on the machine and what’s wrong with it, most costs tend to rise quickly. Repairing a washing machine can be anywhere from $80 to $600, and a dishwasher is extremely similar. The oven usually starts at $100 for repair. Imagine your fridge breaks down – that can cost between $40 to $1,000, though the average is in the ballpark of $300.
The replacement cost for these appliances isn’t any better. Across the board, it’s always cheaper to repair your appliance than replace it outright. A fridge can cost between $1,000 to $7,000, which is way higher than your yearly premium for an average home warranty. When you consider how old your home is and the age of the appliances, the appeal of a home warranty only gets sweeter. It’s completely worth it.
If you’re buying an older home, or your home is getting up there in years (or even if it’s brand new, and you just want peace of mind), it’s a great time to consider getting a home warranty. The best home warranty for older homes will cover the gamut of home systems and appliances, from the roof to the ceiling fans to the fridge and toilet.
These old home warranties are beneficial in several ways. They fill gaps in your homeowner’s insurance. House insurance fixes damage caused, like damage from fire or flood. If you have a burst pipe, a leaky roof, and an electrical short, your insurance won’t cover the cost of that repair. You’ll need your home warranty for that. It also saves on repair costs, with the average cost for repair being nearly the cost of a year warranty policy.
A home warranty can save you time as well. If you’re great at DIY projects, but you’re a busy individual- with a family, obligations, and a need for some downtime to yourself- it’s worth having a repairman come in and take care of the little things for you. A malfunctioning appliance is like a rock in the bottom of a shoe. It’s going to be a pain point every time you use it. Once it’s repaired, it’ll be one less weight on your shoulders. If you want some peace of mind and protection for your wallet, then it’s a great idea to consider a home warranty for older homes.
