Home repairs are a major financial strain, and tend to happen when you’re least prepared. That’s one reason why home warranties are gaining popularity among Colorado homeowners.
Difference Between Homeowner’s Insurance and a Home Warranty
There’s often some misunderstanding about the differences between a home warranty and your homeowner’s insurance. Your homeowner’s insurance usually covers losses caused by outside forces, such as weather, fire, and sometimes vandalism. The bottom line is that insurance tends to cover things you couldn’t foresee happening.
A home warranty, on the other hand, covers things in your home in the event of normal wear and tear and old age. Whether you anticipated these things or not, they are more predictable and are often not covered by your insurance. However, keep in mind that not all home warranties cover the same things, so do your homework.
Not All Home Warranties Are Equal
Just like insurance policies, home warranties offer a range of coverage based on the provider and the cost of your warranty. If you’re investing in a home warranty to cover your HVAC system, you’ll want to read the fine print. Many lower-cost warranties cover things like your oven, refrigerator, washer, dryer, or dishwasher. However, to get coverage for your furnace or air conditioner, you’ll likely need an add-on or higher-tiered warranty.
The specific coverage varies from provider to provider, so make sure to shop around and read the fine details before purchasing a warranty. Especially important among home warranties is the price you pay combined with the service fee should you make a claim. Like many other policies, the higher the service fee, the lower the warranty cost. Likewise, the less that’s covered, the less you’ll end up paying.
Finally, not all warranty providers offer the same level of service. Make sure to read through reviews to find one that offers a prompt response and assistance when you need to file a claim.
What Warranties Don’t Cover
Before purchasing a home warranty, it’s critical to understand what it’s not going to cover. Warranties aren’t going to cover weather-related damage. This means that flooding in your basement, flying debris hitting your condensing unit, damage from ice, or any other weather phenomenon will not get coverage from your warranty. Thankfully, your homeowner’s insurance should cover that kind of loss.
Also, most home warranties don’t cover preexisting conditions. In other words, if a problem is identified during your presale inspection, it will likely be excluded from the warranty. That means that if you purchase a home with a 12-year-old furnace, it’s not going to cover repairing it or replacing it.
Terms To Keep Your Warranty Valid
Just like HVAC manufacturer warranties, a home warranty that you purchase will have some terms to keep it valid. Chief among warranty terms that cover your HVAC system is routine maintenance.
Your HVAC system has an expected service life, usually 10 to 15 years for your air conditioner and 15 to 20 years for your furnace. However, that anticipated service life is predicated on your system receiving routine maintenance.
This maintenance does several things to help extend how long the system will serve your home. First, maintenance focuses on cleaning out the areas of the system that commonly get dirty and cause airflow or fuel restrictions. This includes the evaporator coil, condensing coil, circulating fan wheel, furnace burner, thermocouple, and heat exchanger. They also tighten mounting hardware and electrical connections to reduce wear from vibration and electrical resistance.
Finally, a technician looks for small problems and signs of a component failing before you end up with a full HVAC failure. Finding these issues early prevents excessive wear on the system that leads to larger problems when ignored.
A warranty provider wants to ensure the problems they’re covering are due to normal wear and not negligence. Failing to properly maintain your system falls into negligent use.
Understanding How Claims Work
You purchase a warranty and ensure that you’re meeting all the terms to keep it valid. Then, you have an issue in the middle of the summer where your air conditioner stops producing cold air despite constantly running. You call the warranty company for help; now what?
You would think that you should be able to call any contractor to get your system back up and running. But the warranty company gives you a specific list of companies that they’ll allow to complete the work. You get them out, and they notice that your unit is 12 years old, a time when you should start thinking about replacing it.
However, the warranty company is the one calling the shots here, not you as the homeowner. If you want them to cover keeping your home cool, you’ll have to settle for whatever they deem appropriate. Unless your system has suffered a catastrophic failure, they are likely to want a repair rather than replace your system. This can leave you in a tight spot where your system may fail at any time in the future, even if they fix the immediate problem.
However, most HVAC failures occur during the most intense part of the season, when you depend on your system most. But this is also when HVAC service companies are their busiest because aging systems are giving out.
Rather than make you wait, some warranty companies will offer you a cash solution. This is where they’ll give you cash, and then, you can go to the company of your choice to get the repairs completed. However, this cash option is often substantially lower than the contracted rate that they’ve established with their partner providers, sometimes as low as 30% of the required repairs.
Your Repair May Not Receive Priority
Even with the providers that your warranty company has a contract with, you may not receive a priority appointment for a repair. The contracted rate negotiated between the service provider and the warranty company is often lower than the going rate for their service, so any work orders brought in through that contract often receive lower priority scheduling to allow them to keep their profit margins higher.
A Warranty May Be Redundant Coverage
Finally, keep in mind that a warranty may provide redundant coverage for your HVAC system. Most professionally installed HVAC systems come with a manufacturer’s warranty. During the period covered by the manufacturer, an additional home warranty becomes redundant because the manufacturer will take care of most issues covered by a home warranty. There may be other parts of your home that would benefit from the home warranty, but you may not need it for your HVAC system.
People have turned to the NATE-certified technicians at Summit Heating & A/C to keep their homes comfortable for over 20 years. Our team provides a combination of heating and air conditioning installation, maintenance, and repair combined with indoor air quality and plumbing services to all of our neighbors in Littleton and the rest of the Denver metro area. Call to schedule your HVAC repair with one of our friendly technicians today.