Home Warranties And Your HVAC System

Is a home warranty worth considering for your home heating and air conditioning system?

What are the benefits and what are the inside secrets, so we don’t get taken advantage of?

If I get a home warranty plan for my heating and air conditioning system, what’s covered and what’s not covered?

Are there any requirements for maintaining the home warranty plan for my HVAC system?

These are just a few of the questions we get on whether a home warranty is worth the time and money you spend to keep your heating and air conditioning system efficient.

Most homeowners don’t realize how common it is for an older system to break within the first year of moving into a new home. The heating and air conditioning system goes through a major change in its routine operation and starts throwing a fit… literally.

But, don’t be blindsided when trying to get your home warranty company to cover your HVAC repair or replacement. We wrote this article to help you be better equipped to move forward with your home and HVAC repairs.

While I do not intend to recommend one home warranty company over another in this article, I do want to share my experience with you, and, at the end of the article, I will make some recommendations beyond home warranty companies. Read these to be ahead of the curve and avoid any unexpected system issues.

Over the 10+ years that I have spent in the field, sales, and operations departments of a heating and air conditioning company, I have seen the good, the bad, and the ugly as it pertains to home warranty companies. I intend to share all of my experiences here for you to take and digest. In the end, it is your responsibility to make a decision that best suits your needs, as a whole. I cannot speak to other industries or other needs in your home. Just simply provide an insider perspective with my experiences.

If at the end of this article, you have questions regarding your particular situation, please feel free to give us a call, and one of our expert staff members will assist you. Additionally, please let us know if there is anything unique about your HVAC home warranty experience, as we would love to add it here for the benefit of others.

My experience with a home warranty company as a service technician

As a service technician, it is my job to service both homeowners and home warranty companies. This means that I have to relay my diagnostics, findings, and all other pertinent information to a home warranty company. Usually, a call center in another state takes my call and gathers all information that they need to process the warranty claim. Then, the home warranty company either authorizes or declines the claim based on the information provided and on the level of coverage, their customer (the homeowner) has.

Level of Coverage

Some plans offer extended or more comprehensive coverage based on fees and monthly payments. I have seen some basic plans just cover the major appliances in the home while other plans will offer coverage on garbage disposals and water softeners.

Information Provided

The warranty is active once purchased, but there are a few more steps required before repairs can be authorized.

• The home warranty company needs to know the make, model, and serial number of the equipment.
• Some home warranty companies will see if the system is covered under an existing manufacturer’s warranty.
• In other instances, they will identify that the system has been repaired within the last one to three years with another facilitating service. This can put me at odds with the homeowners because I have to tell them that their service won’t cover the needed repair.

In our experience:

• Most home warranty companies are seeking the service of a cut-rate contractor. A “cut-rate contractor” will have cheaper prices for several reasons. This can be seen in their response time, as well as their outdated diagnostic capabilities, meaning they only focus on the most immediate issue instead of researching and diagnosing all systems and providing an assessment of the larger picture.
• Processing a home warranty claim for your heating and air conditioning system usually takes 10 days. In the busier summer months, I have seen processing times of more than three weeks. Yep, three weeks without air conditioning!
• Home warranty servicing companies usually have insufficient resources to take care of calls in a timely and efficient manner. And in some cases, the HVAC contractor would simply forget to even schedule the customer!
• Long processing times can also result from home warranty companies seeking a second or a third opinion on the repair. These instances are the most challenging for homeowners because they are being led to believe that their work will be covered. Most often, the home warranty company is looking for the cheapest route or even looking for a service contractor that is simply inadequate — either in size or in operational capabilities — to let them know that they will not cover the repairs.
• Most cut-rate contractors will not put in the time to become an advocate for the homeowner. Part of the reason you hire a professional is to get the problem fixed right the first time. Often, an issue shows up because of a failure or lack of maintenance in another part of the heating and air system.
• Home warranty companies only repair the most immediate fix. I often find myself on the phone explaining to their representatives that certain additional parts need to be replaced, so this issue doesn’t show up again in the future and the additional work is declined. The additional repairs are often deemed as preemptive and therefore not needed.

“The main objective of the home warranty company is to restore operation with as little risk and cost as possible.”

• Extensive phone time. Reaching a call center in another state is hard enough as it is, let alone during peak demand times when other air conditioning and heating systems are failing across the country. A 45-minute wait time is not abnormal in most cases. This drags down efficiency and can even lead a repair to being authorized past 5 PM, at which point our vendors are closed.
• Many of the older systems that I have come across would be better off replaced than fixed. This usually applies to systems that are 10+ years old. Older systems may require banned refrigerant and obsolete parts, all while being extremely inefficient. That’s why repairing these systems isn’t worth it. If the system needed to be replaced and the home warranty company authorized the expense, homeowners are only eligible for the cheapest replacement system available. Those who wanted to tackle additional concerns, like hot and cold spots throughout their home, were at the mercy of what the home warranty company decided was going to happen.
• Most air conditioning and heating systems are repairable but often inefficiency, lack of current code compliance, and the peace of mind that comes from a new system usually make common sense.
• Off-brand parts. When a repair was authorized for the heating or air conditioning system, the parts were coming from a cheaper manufacturer. This would mean that we had to use universal parts instead of factory-authorized parts. Universal parts do not last as long and can negatively affect the performance and efficiency of the system. Many of the parts I installed during these service calls were not parts I would install in my system.
• The worst part is that sometimes a claim would be denied! Yep. Wait 10+ days only to find out that the air conditioning or heating system isn’t covered. Those are the worst calls for me!

My experience on the operations side of our company

• Extremely resource-intensive work. Many times, we would have to wait for the home warranty company to send us their parts, which meant scheduling a second or third visit. They also required that we kept in close communication with the homeowner waiting for the arrival of these parts.
• “Average ticket.” This was a term we heard a lot from home warranty companies. It means that whichever HVAC company has the lowest average ticket in our area would get future work. The authorization was not made based on the quality of work, but based on whoever could cut the most corners on their expenses. This usually results in lower-quality work and an overall bad experience for the homeowners. Home warranty companies are also looking for an HVAC business that they can push around — a cut-rate contractor that will take no for an answer and not advocate on behalf of the customer.
• Rushed service. With low profitability and customer complaints, we would often have to rush through our work to try to be profitable. As a company, we quickly realized that we didn’t want to cut corners and have our name associated with this type of work, all while leaving our other existing customers to suffer. To grow our business, we had to operate at a profit, not at a loss.
• Declined payment. One of the most frustrating parts of dealing with a home warranty company was jumping through all the necessary hoops to facilitate a service just to receive a phone call with what was going to be paid. The majority of the calls that we ran were pre-authorized at a determined rate from the home warranty company. However, when we would invoice the home warranty company, we were told that what they would pay was usually not the agreed-upon price. More often than not, the payment would be lower than our labor costs, and we would take a major loss to complete this service. It was up to us to negotiate these terms in hopes that we were talking with the right person and the right department to make those decisions.

I have over 10+ years of experience both in the field and in the management part of our business, and many customers (up to 80%) have expressed dissatisfaction with their home warranty company.

Recommendations

If you are buying a home warranty plan while purchasing a home, we strongly advise having a licensed heating and air conditioning company perform the HVAC inspection before purchasing. Don’t hesitate to ask for copies of all prior repair work performed. This can give you great insight into the health and reliability of the system you’ll be inheriting.

Also, make sure that the seller of your home warranty plan provides more than a simple pamphlet. You will want a copy of the fine print if you need to call your home warranty company for any heating or air conditioning repairs.

It can be easy to get caught up in the thrill and excitement of buying a new home but don’t miss the key details that are usually buried in a brochure or some website.

Some home warranty companies will extend coverage to any company you wish to hire; they just need to go through the authorization steps of facilitating service and coverage. While we have seen customers win with this type of plan (not offered by all home warranty companies), the heating and air conditioning company usually is the suffering party.

If the system is older than 10 years, I would strongly recommend undertaking the expense of a home warranty company. Invest in these two things instead — saving for a new system and routine maintenance. Routine maintenance and periodic cleaning will prevent the systems from failing and also put you ahead of the game as far as repairs and replacements are concerned.

Our technicians will provide a detailed report of things that need to get addressed and a timeline to address things without any sales pressure. When it comes time to address replacing the system with something more energy-efficient and reliable, we can provide estimates and options that will meet your budget and needs. Plus, you’ll be able to get the features and benefits you want, instead of being at the mercy of an outside company deciding to offer you the cheapest unit possible.

Doesn’t the saying go, “An ounce of prevention is worth a pound of cure?” Investing in maintaining your system is easy! Just choose a maintenance plan that fits your budget. Most of our customers enjoy the monthly payment instead of having to pay for maintenance all at once. Call in and take advantage of this benefit today!