More Problems With HVAC Extended Warranties On Home AC Heating Systems

Sometimes a confluence of events inspires me to write a blog post. Today’s post — which is about problems with HVAC extended warranties on AC, heating and related equipment and services — has three contributing sources that all came together recently.

• Last week, I’ve read a lot of chatter on some HVAC forums about HVAC contractors who are having problems getting third warranty providers to honor (pay for) warranty work needed by homeowners under their extended warranty policy. The scope of the problem seems fairly serious.
• Yesterday, I visited the home of a friend, a mechanical engineer who is meticulous about writing specs for work done at his home. He recently bought a new AC heating system that came with a 10 year parts and labor warranty: 5 years parts and labor from the manufacturer, and “the company who installed it arranged for an additional 5 years parts and labor as part of the package”.
• Then driving home, I listened to one of my favorite syndicated radio shows, the Clark Howard Show. He generally discourages listeners from buying many types extended warranties. Clark’s advice (and I’ll paraphrase here) is to not buy an extended warranty (which is a type of insurance policy) unless the consequences of not buying it could turn into a major financial problem.

Before going further, and as this topic relates to heating and AC systems, I would make a distinction between an HVAC extended warranty offered by the equipment manufacturer and ones offered by third parties.

The most important factor is getting the equipment correctly sized and installed. Next, let’s talk about maintenance. Regular maintenance such as timely filter changes and yearly servicing, will cause AC and heating equipment to need fewer repairs, last longer and waste less energy. In the overall budgeting, we rank scheduled maintenance ahead….way ahead… of an extended warranty.

Now, we’ll add our knowledge about the AC and heating industry to Clark’s general advice. By the time you factor in any deductibles and the time required to haggle with them, a (possible) future expense you could incur from not buying HVAC extended warranties on a AC and heating system would not likely be a major issue for most homeowners. For extended warranties, you either pay cash up front, or it is somehow “built in” to the package price (along with interest you are paying). Either way, you are paying for something you may not need or be able to use later.

Summary

• The overall value of extended warranties in AC and heating equipment is questionable…clearly, a buyer beware situation.
• For your budget priorities, we recommend that you get top quality work on the sizing and installation of the new equipment. Then, focus on filter changes and a yearly maintenance plan as higher priority than an extended warranty.
• If you are going to buy an extended warranty, find out which company actuallyunderwrites the policy. Look for one with the manufacturer behind it.