Benefits of a home warranty for an older home
A home warranty can help alleviate some of the unexpected costs that come with an older home, such as aging systems and appliances. Not only can it provide confidence to potential buyers during a sale, but it also shields homeowners from unforeseen repair expenses. Here are some key benefits:
- Fill coverage gaps: Home warranty plans cover repair or replacement costs for appliances and systems affected by wear and tear — things homeowners insurance typically doesn't cover.
- Save on repair costs: Predictable monthly premiums replace large, unforeseen expenses, and a nominal service fee (often $50 to $150 per instance) is usually all you'll have to pay for repairs.
- Access qualified repair service: Home warranty plans connect homeowners with experienced, vetted contractors, ensuring quality workmanship and guaranteeing repairs.
- Lessen financial concerns: Older homes inevitably need maintenance, so a warranty plan provides resources to keep the house running smoothly without depleting your savings.
What a home warranty covers for an older home
Home warranty coverage pays for repairs or replacements to your major systems and appliances if a covered issue occurs, like a breakdown due to normal wear and tear.
Systems typically include:
- Electrical
- Heating
- Plumbing
- Air conditioning
- Water heater
- Ductwork
Appliances typically include:
- Dishwasher
- Refrigerator
- Oven and stove
- Built-in microwave
- Washer and dryer
- Garbage disposal
Some home warranty plans also offer optional coverage for the following:
- Roof leaks
- Well pumps
- Septic tanks
- Pools
If your home is old, your appliances and systems may also be old, unless they've been replaced recently. Some warranty providers require proof of service history on your appliances, or may exclude some at a certain age. Make sure you read the fine print of each warranty before you sign up to confirm which appliances and systems are and are not covered, so you're not surprised later on if something breaks.
Limits for coverage on older homes
Coverage limits exist for older homes, so you need to pay close attention to maintenance requirements and potential upgrades. Some appliances or systems may require upgrades to comply with coverage criteria, while rare or antique appliances might exceed typical replacement cost limits.
Nearly all home warranties also exclude coverage for known preexisting conditions, so if you know of a problem in advance, the home warranty company won't cover it. Some do cover unknown preexisting conditions, though, such as defects that were not obvious during a visual inspection.
These limits can apply to the warranty term (typically 12 months) or the maximum allowance to repair or replace specific systems and appliances. Once the repair reaches the coverage limit within the contract's time frame, you must pay any extra costs out of pocket.
How to choose a home warranty for an older home
When choosing a home warranty for an older home, it's essential to evaluate your specific needs and the condition of your home's systems and appliances. Here are some steps to guide you in choosing the best company for an older home:
- Assess your home's needs: Make a list of your home's systems and appliances, noting their age and condition.
- Compare plans and providers: Look at multiple home warranty companies and compare their coverage options, service fees, and contract terms.
- Check coverage limits: Ensure the plan offers sufficient coverage for expensive repairs or replacements.
- Read the fine print: Carefully review exclusions and limitations to avoid surprises when you need to file a claim. Talk to a representative or review a sample contract for coverage limitations on older homes and appliances. It's also smart to check the maximum coverage limits for your home warranty.
- Look at customer reviews: Research what other homeowners say about the company's responsiveness, repair quality and claims process.
Home warranties vs. homeowners insurance
Unlike homeowners insurance — which is mandatory with most mortgages — home warranty plans are optional coverage you can purchase anytime. Most home warranty companies will cover your home regardless of its age. However, it's essential to note that coverage limitations and exclusions might apply, especially concerning older systems and appliances.
While homeowners insurance covers damage or loss related to your home's structure or personal belongings, home warranties cover repairs to appliances and home systems like electrical and plumbing.
FAQ
Are home warranties worth it on older homes?
Yes. Older homes typically require more maintenance and repairs than newer constructions. However, investing in a home warranty plan helps homeowners afford unexpected costs associated with outdated appliances and systems.
Does a home warranty cover existing problems?
No. Home warranties only cover problems that arise after the warranty is in effect. Even then, many plans come with a 30-day waiting period, during which the home warranty company won’t usually cover any issues that arise.
When you buy a house, does it come with a warranty?
Sometimes. Many sellers and real estate agents purchase a home warranty to help with negotiations. The home warranty offers extra reassurance and can help finalize a sale for worried buyers — especially when you’re dealing with an older home. For new home buyers, requesting the inclusion of a home warranty in the closing transaction can help work around coverage waiting periods, offering immediate protection.
How late can you buy a home warranty?
You can purchase a home warranty at any time, whether you're buying a new house or have been living in your home for years. However, if you wait to buy until after a problem arises, that issue won't be covered. Some plans may also have a waiting period before coverage begins, so it's best to purchase early to ensure continuous protection.
Bottom line
Buying a home warranty for an older home isn't just feasible; it's advantageous. Whether supporting sellers in closing the deal or protecting buyers from unforeseen expenses, these plans offer valuable support in maintaining the unique charm of older properties.
