Official contract on meeting

Home Warranties vs Extended Service Agreements (ESAs)

Home warranty and HVAC warranty solutions companies differ by provider.  

As you consider coverage you should compare having your air conditioner, furnace, or other HVAC equipment covered by a home warranty company vs an HVAC warranty solution like an ESA (Extended Service Agreement) from your contractor.  Let’s compare the two types of coverage.

ESAs provide more value than home warranties for the first 10 years of HVAC equipment coverage.

HVAC home warranty 

Home warranty companies offer a product that works more like an insurance policy with monthly premiums that requires a deductible when something fails.  

In order to retain coverage, you need to continue paying your premiums. 

What do home warranties cover?

In addition to HVAC equipment, home warranty companies can cover appliances, water heaters, and other systems within a home.  Many of the plans offered are customizable.  You can add and remove systems and appliances as you see fit.  Unlike ESA programs, some home warranty companies require you to purchase additional coverage or separate contracts to cover your HVAC equipment. 

You should ask if HVAC equipment is covered under the policy when signing up for the program.

What do home warranties cost?

Home warranties work much like health insurance premiums in that you pay a monthly fee and a deductible. The monthly fees range depending on location and type of coverage.  

Plans start at as low as $50 a month and can go up to $160 a month.  If you annualize that monthly premium, they can cost from $600 to $1920 a year.  It’s important to note that in addition to the premium, you will also pay a deductible when a repair technician comes to your home. 

There are also dollar limits on repairs which would leave you responsible for repair costs that exceed those  dollar limits.

Do home warranties require a deductible?

All home warranty companies require a deductible to be paid by the homeowner. The deductibles range from $75- $125 for HVAC system repairs. The deductibles are required to be paid at the time of service and are in addition to the monthly fee that the homeowner pays for the home warranty program.

Claims

Home warranty companies do not typically require the homeowner to manage the claims process – the contractor is responsible for claims.   However, consumers often find it takes multiple attempts to get repairs covered under a home warranty.

Pre-Approvals 

Home warranty companies require preapprovals from the warranty company before the technician can make repairs.  This means after the technician determines the problem they need to call and wait for approvals from the warranty company before they can perform the required repair or part replacement.  This adds to the time it takes to resolve your problem and get you back up and running.

Premium changes over time

When adding home warranty coverage, the premium is not fixed for a 10 year or 5 year period.  The premiums can change and so can the deductibles and the dollar limits.  That means in 5 years you can expect to pay more for the same coverage you are receiving now.

Coverage duration

Coverage for your equipment is only valid while you are making the monthly payments.  If you stop paying your premium your coverage stops.  If you have been a customer for 4 years and a month after you stop coverage your furnace breaks down, you are on the hook for the entire repair cost.

For the first 10 years of coverage home warranty costs are considerably higher than that of ESAs and also require a deductible to have HVAC equipment serviced.  

Coverage provided by home warranties stop if you don’t pay your monthly premium.  Home warranties offer coverage for equipment that is over 10 years old where ESAs do not.  Home warranty coverage can be purchased at any time while ESAs can only be purchased up to 2 year from the date of installation.

Air conditioner extended warranty & furnace extended warranty solutions 

See how home warranties compare to extended warranty solutions for HVAC equipment.

 Home Warranty VS ESA for web

HVAC Extended Service Agreement 

ESAs work more like a furnace extended warranty or an air conditioner extended warranty similar to what is offered when you purchase items from a big box store and they ask you “would you like an extended warranty with your purchase.”  

This option offers different coverage periods and pricing.  Once you pay for the extended warranty you are covered for the duration of the agreement.  

What do Extended Service Agreements cover?

ESAs, which are sometimes referred to as extended warranties, will typically cover HVAC equipment for up to 10 years and are usually purchased at the time of install.  

Coverage ranges from as little as 5 years to up to 10 years for your typical HVAC system and up to 12 years for a mini split system.  

Unlike home warranty companies, coverage can only be added at the time of purchase or within 2 years after install of your HVAC system.

What do Extended Service Agreements cost?

The price of an ESA varies depending on the length of coverage you are looking for, where you are located, what you are looking to get covered (furnace, A/C, heat pump, etc), and contractor you are using.   

Generally, you can purchase coverage for 5 to 10 years.  Some contractors will build this coverage into their pricing but generally pricing can start as low as $500 for 5 years parts and labor coverage on a complete system and can reach as high as $1800 for 10 years parts and labor coverage.  

ESAs are a one-time cost and require no additional monthly payments.

Do extended service agreements require a deductible?

When you cover your system with an ESA, covered repairs do not require a deductible to be paid.  There are no out of pocket expenses when the servicing contractor makes a covered repair on your equipment.

Claims

The servicing contractor is responsible for dealing with claims when you need to have covered repairs performed on your equipment.  The homeowner does not have to deal with the ESA provider. The ESA coverage is defined at the time of purchase, eliminating the guessing game of what is covered or not. The contractor will perform the covered repairs and work directly with the ESA provider for reimbursement.

Pre-Approval

The homeowner is not responsible for attaining pre-approvals.  The contractors that service your equipment generally are not required to seek preapprovals from ESA providers.

Cost over time

ESAs are different from home warranty coverage because they do not have any monthly premiums and there is no increase in cost for the duration of coverage.  The price is fixed when the coverage is purchased. Essentially you are paying for future repairs with a one-time payment in current costs. There are no additional expenses associated with coverage.

Coverage Duration

ESA coverage is in place for the duration of the coverage period.  For example, if you buy 10 years of coverage you will be covered for 10 years.   

ESAs provide more value than home warranties for the first 10 years of HVAC equipment coverage. ESAs cost significantly less and require no deductibles at the time of service.  Compared to home warranty coverage, ESAs need to be purchased at the time of install or within 2 years of the install date, and they only provide coverage for up to 10 years.

Ask our experts to explain the extended warranties available for your new or existing equipment 

Choose Trinity for your extended HVAC coverage

Trinity Warranty is one of the leading extended warranty providers for the HVAC/R industry.  Trinity’s ESA group is backed by multiple “A” rated national insurance carriers.  If you are looking to have your HVAC system covered by the best, make sure to ask them to work with Trinity Warranty.