Clark Howard

I’m Facing a Major Home Expense. Should I Fix It Proactively or Wait Until It Breaks?

If you own a home, you know that your mortgage payment is far from the only expense.

You tackle utility bills, property taxes, homeowners insurance and more. But perhaps one of the most frustrating things is contending with unexpected repairs that sometimes reach into the five figures.

In some cases, you know you’ll need to replace a roof or a water heater at some point soon. Should you pull an ostrich and bury your head in the sand until you’re forced to pay? Or should you be proactive and take care of it on your own time?

How Should I Handle an Imminent, Major Home Expense?

I’m facing a near-certain, expensive home repair. Should I wait as long as possible or make a plan to pay before it breaks?

That’s what a Clark Howard podcast listener recently asked.

Asked Jeffrey in New Jersey: "I live in a neighborhood in New Jersey where the homes were built by one builder in the mid-1980s. Unfortunately, two of my neighbors have had to replace their main water service line. Each situation required a full line replacement at a cost of ~$10,000.

"My neighbor was told that the lines in the neighborhood were originally installed with cheap materials and will probably continue to fail. My home insurance company (USAA) has been fabulous but does not provide service/sewer line riders.

"Does it make sense to purchase a service line warranty? If not, how would you plan for this sort of expense? I am also padding my emergency fund because my roof and air handler are both original to the house and will need to be replaced soon."

Jeffrey asked about a specific type of water line that may not apply to many people. But the concept of home repairs is common.

To first address the water service line, Clark says that two generations ago, builders caused a “scandal” with polybutylene pipe.

“The manufacturers of it knew it would not work. But it was cheap,” Clark says. And polybutalyne was really easy to install.

“I’m stunned that your polybutylene pipe is still working from 40 years ago. Because they always say about polybutylene that it’s not a matter of if, it’s a matter of when it fails.”

Clark also mentioned that the insurance riders for replacing an entire water service line are shaky. Because paying $15 a month to protect what’s potentially a 40-year-old polybutylene pipe, nearly certain to need replacing in the coming years, isn’t great math for the insurer. Especially considering the potential $10,000 cost.

So those types of insurance policies typically include a lot of exceptions in the fine print that may come back to bite you.

Problems and Challenges If You Delay Replacing the Item

On paper, it may make financial sense to ride out the old water line as long as possible. That way Jeffrey can pad his emergency fund (and make 5% in a high-yield savings account right now).

But according to Clark, Jeffrey faces three issues if he doesn’t fix the water line proactively.

  • You could face a giant water bill if the pipe deteriorates and starts to leak.
  • You may face a sudden but extended period without access to water.
  • If you need to sell your house at some point and haven't replaced it, you'll probably need to do so.

“So it’s best to budget for it. And in my belief, to proactively replace it,” Clark says. “Because as your neighbors experienced, really it’s a question of when, not if, that line’s going to go.”

Final Thoughts

Your main water line may not be on the edge of impending doom. But many of the same principles apply.

You have a major home expense that’s a matter of when, not if. In that case, waiting until it breaks could lead to damage to your home, inconvenience at the worst possible time and an unexpected and expensive bill.

Planning your finances and taking care of it proactively is a good choice. Especially if you’re sure you’re going to have to replace the item soon anyway.

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