Tag Archives: extended warranties

More Problems With 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 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 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 extended warranty 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.


  • 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 actually underwrites the policy. Look for one with the manufacturer behind it.

Extended Warranties for Home Air-Conditioning and Heating Systems

Frequently, we learn lessons from other industries that apply well to home heating and AC.  The other day, I had to visit my independent auto mechanic shop. While in his waiting area, I overhead him tell another customer that he “never recommends his customers to buy third-party extended warranties on their car or truck”.  He went on to say that that third party warranty companies were diligent at selling warranties /repair insurance and collecting premiums, and not-so-good at being around later or paying out for claims.  In case the term is new to you, ‘third party” simply means a company not involved otherwise in the transaction.

While monitoring HVAC industry forums and news, what I have read seems to generally support my mechanic’s overall assessment on extended warranties offered by third parties.

First, let’s be clear on the difference in the types of warranties that you can buy for your home heater or air conditioner system. The following parties typically offer warranties on heating and A/C equipment, either when it is first installed or sometimes later. :

  • Manufacturer of the equipment
  • Local dealer or independent contractor who installed the equipment
  • A third party insurance or warranty company,  who is not the manufacturer or installing contractor.

Extended warranties will usually provide different terms for (or ways to dictate coverage of) the following:

  • Main Components  (compressors, condensers, heat exchangers, etc)
  • Parts (other than the above)
  • Labor to diagnose and fix any warranty claims (this can be a higher amount than parts)
  • An amount of time the warranty covers
  • Deductible (amount that must be paid by you later before warranty starts paying)
  • “Ordinary wear & tear”, abuse or neglect vs. a failure or repair covered by the warranty
  • Which repair company is required to do the work for you to be eligible for payment
  • Does the warranty pay for the repair directly, or do you have to pay for it and apply for reimbursement


  • Higher efficiency or more sophisticated heating, cooling, heat pump or indoor air quality equipment increases your likelihood of needing /using  an extended warranty.
  • A yearly maintenance plan is something most owners should have but do not
  • If you only have budget for one of the two, go for a yearly maintenance plan over an extended warranty
  • Always be clear on what the manufacturer’s warranty covers and exactly what any extended warranty actually gains you above what you already have from the manufacturer or installer
  • If you have the discipline, you could take the money you were going to pay an extended warranty, deductibles, and excluded items and instead, put it in a savings account. You can use those funds to pay for your own maintenance and repairs later.
  • Regular maintenance will help prevent the need for repairs from neglect
  • If you decide to go with an extended warranty, those from a large manufacturer are usually a better bet than the other two categories.  Sometimes dealers are owned by the manufacturer. It helps you to know if they are or are not.

If you have experience related to this, whether you agree with the comments above or can offer something to the contrary, please post your comments.

Who needs A 99-year warranty on their home A/C compressor?

In the monthly HVAC trade journals, I’ve been reading about a 99-Year warranty for AC compressors.  Their main message: buy this and you won’t have to pay for repairing or replacing your compressor until the year 2107.

Thinking there could be grist for the blog mill here, I called a manufacturer advertising the offer and was told the following by their representative:

The actual warranty is not from the manufacturer, “it is from their distributors. The distributor decides the terms and would honor it, not the manufacturer.”
The distributor sells the air conditioning equipment to the contractors, who then install and service the equipment in homes.
However, the rep went on to say that not every distributor who sells this brand of equipment to HVAC contractors is actually authorized to offer a promotion of this type, only certain ones.

Candidly speaking, what I heard did not pass the most basic common sense test.  No matter who offers it, here are some questions you should consider before shelling out for a super long warranty:

– Considering regulatory changes and advances in refrigerants, efficiency, electronics, plus the cost of parts and labor not covered by a 99 year compressor warranty, how likely is it that your whole cooling and heating system will not be functionally or economically obsolete within 15 years? (Think of your home computer: your 12 year old PC running Windows 95 may still boot up, but is it of any practical value?)

– What happens if the distributor gets sold, reorganized, or goes out of business? Who, if anyone, would stand good for your 99-year warranty? How much trouble would it be to find them or convince them you have coverage?

– What happens if you sell your house? Is that warranty transferable to the new owner?

The irony here: for some of the more sophisticated HVAC equipment, an extended warranty from a reliable source is something homeowners should consider. The right extended warranty can more than pay for itself and help you avoid unplanned repair bills. Examples of where they can be a good value: for sophisticated high-efficiency units or some types of indoor air quality equipment such as whole house air cleaners, dehumidifiers, etc.

In summary:  unless facts come in to the contrary, a 99-year air conditioner compressor warranty looks like hype and undermines the concept of extended warranties of more realistic length. Let’s get real.