What to Know if You Have a Home Warranty & An HVAC Problem

Home warranties have something of a mixed reputation, especially if you have an HVAC  problem. They are often included when homes are bought and sold to give a new homeowner confidence that they are “covered” in the event off a breakdown. Sometimes people purchase them to give what they think will save them money down the road. They can save a homeowner money in certain circumstances, but there are tradeoffs, too.

In our opinion, it’s much more accurate to think of a home warranty as a “discount plan” rather than an insurance-type of product. Many of the complaints we hear are related to a homeowner’s high expectations and misunderstanding of what the home warranty covers and doesn’t cover. Here’s what you need to know:

Home Warranty Companies Choose Your HVAC Service Provider

Often, when you have an HVAC equipment malfunction and need professional help, a home warranty company will dictate which contractors are allowed to repair it. What they won’t tell you is that they often contract with technicians that are new to the business and less experienced because their reimbursable rates for labor are lower than the market average.

This means you won’t have choices about who to work with, and you are likely not getting someone who has lots of experience. We have contractor friends who got started doing home warranty work in order to build their business, but they are no longer doing that work because it does not adequately cover their costs and they wanted to better serve their customers.

You Don’t Get to Choose to Repair or Replace

Think you will be the one deciding whether to repair or replace an air conditioner that is at the end of its life cycle? If you have a home warranty contract and are seeking a replacement, you may not get to make that decision. To save money, it has been our experience that home warranty providers often elect to repair rather than replace.

They are betting it is cheaper to repair several times, rather than replace a system. It may be cheaper, but it can be a hassle and more expensive to the homeowner in the long-run.

When home warranties do replace equipment, they pick the cheapest, least energy efficient equipment, which can be less reliable. It is an unfortunate truth that you get what you pay for.

A Home Warranty Doesn’t Cover Everything

As mentioned earlier, home warranties should be considered like a “discount plan” because they have discreet limits about what they cover. It’s always best to read the fine print, so you know what they cover and what they don’t. This puts you, the homeowner, in the driver’s seat and empowers you to decide how you’d like to handle a repair when it comes up.

Appliances typically covered by home warranties

Many types of HVAC systems including central air and heating systems, heat pumps, mini split systems are typically covered. Home warranties often include repairs to a home’s plumbing, electrical system, and major appliances such as refrigerators, stoves and water heaters.  

 A home warranty does not often cover weather-related repairs

If a weather system comes to town and causes a flood which submerges your HVAC system, a home warranty will likely not cover that expense. Sometimes flood damage may be covered by a homeowner’s policy, but having flood insurance may be required. It pays to read the fine print especially if you live in an area that has flooded before or that is under threat of hurricanes. 

Similarly if an ice or wind storm damages a large tree, and it falls on your AC unit, a home warranty won’t cover those expenses. Your homeowner’s insurance policy will often cover these unexpected, large repairs or a replacement. 

Home warranty often requires HVAC maintenance

Home warranties are offered for HVAC repairs caused by routine wear and tear. This is also why home warranties require you to maintain your HVAC system to receive coverage. HVAC maintenance is critical to keeping your system in good repair, operating efficiently and reliably during the heat and cold.

Many HVAC companies offer service contracts for HVAC units to make recordkeeping and scheduling routine maintenance easier. HVAC technicians recommend HVAC tune-ups in the spring and the fall. It goes without saying that properly maintained equipment fails less often.

You May Have Existing Insurance Coverage Through Other Sources

Always read your home warranty contract completely, so you know what you are buying (or being gifted), and ask a lot of questions. You might discover that you have insurance coverage for an HVAC problem through another avenue. 

If your home is new, your builder may offer coverage if your HVAC system is having problems and it is due to an installation problem discovered shortly after you’ve moved in. We don’t see this frequently but it is possible.

Large unexpected HVAC repairs may be covered by your home owner’s insurance. This is especially the case in the event of a water break, weather, fire, vandalism or other unexpected circumstance.

If you purchase a new heater or air conditioning system, ask about the HVAC manufacturer’s warranty. Definitely make sure that any manufacturer’s warranties for large appliances like your central air and heating system are on file with the manufacturer. Our HVAC company does this automatically as a service to our customers because it ensures they receive a longer manufacturer’s warranty period.

Don’t forget to ask if your HVAC company offers a craftsmanship warranty, too. They should guarantee any work they do on your system. Some more complicated repairs, such as air balancing or a refrigerant leak, may require more than one visit to ensure everything is just right. 

If Conditions Aren’t Met, a Home Warranty Might Not Cover

Homeowners often expect a home warranty to cover *everything*, but they often do not.  You may be on the hook for a co-pay, diagnostic service, a service call to properly maintain equipment, and just a portion of repair or replacement. It’s always best to ask if you’re unsure how their coverage works.

In the summer and winter when the demand for HVAC repair and replacement is high, it may take a home warranty longer than usual to locate a contractor willing to come out to make a diagnosis and repair. (Remember, the reimbursement rates they receive are low, so there is less incentive to act quickly when they are swamped already.)

In the meantime, a home warranty company might give you a cash payout, only paying one-third or less to close-out the claim. This frees you up to negotiate your own fix, but gives you less than the contracted amount you might have originally received. That scenario can and does cause hard feelings.

Expert HVAC Repair Is a Call Away

If you are debating the merits of a home warranty for HVAC repair or replacement, weigh the pros and cons so you better understand what a home warranty really does cover.

In terms of air conditioning and heating equipment, you might be better off with an HVAC-specific service plan, like our Peace of Mind Protection Plan, combined with your HVAC’s equipment warranty.

An experienced Carrier Factory-Authorized dealer, Terry’s A/C and Heating can help you with an expert repair or installation to meet nearly any budget. We guarantee our craftsmanship, too. Contact us to get on our schedule in the West Houston, Katy, Richmond, Fulshear, and Sugar Land, Texas area. We treat all of our customers as if they were family, and look forward to earning your business.