ESAs extend the manufacturer's warranty on expensive HVAC / R / plumbing equipment, and protect against unexpected and untimely costly repairs. We can cover all brands and types of equipment.
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Asking how much an HVAC extended warranty costs is like asking what a car costs. Several factors play into the cost of a car and the same is true for an HVAC Extended Warranty. To start, it is important to clarify that HVAC extended warranties are more accurately called Extended Service Agreements or ESAs. Since everyone refers to them as extended warranties we will also in this article. The cost of HVAC extended warranties is comprised of several factors: Years of coverage, labor rate in your area, the provider of the coverage, and the contractor markup. We will break down each of these factors for you.
HVAC extended coverage can range from 1 to 10 years. As the years of coverage increases, the price of the coverage also goes up. The increase is proportional to years of coverage, for example 10 years of coverage costs about 5 times what 2 years of coverage would cost. Naturally 10 years of coverage would cost more than 2 years. The years of coverage typically refers to only labor coverage as the majority of HVAC equipment manufacturers offer 10 years of parts coverage when you register your HVAC equipment.
Contractors looking to offer years labor coverage for added protection.
Technician labor rates vary from state to state and even city to city. Labor rates are very important in determining the cost of extended warranties.
When you buy an extended warranty, that coverage needs to be able to reimburse the contractor for his labor when he comes to make a repair on your system. The higher the labor rate is in your area the higher the coverage cost. The lower the labor rate in your area the less expensive the cost will be.
For example in San Francisco, California the labor rate could be $150 per hour where in Sully, Iowa the labor rate could be $75 per hour.
The price of coverage is approximately proportional to the cost of labor in each city. You can expect to pay double for the coverage in the city that has double the labor rate.
The higher the labor rate is in your area the higher the coverage cost.
HVAC Extended warranties come from 4 main sources: Third Party Administrators, Insurance Companies, Manufacturers and Contractors. Where the coverage comes from does not have a significant impact on the cost of coverage.
Where the coverage comes from can have an impact on the quality of the coverage. First, large manufacturers that provide the 10 year parts warranty are well equipped to offer the extended labor coverage as well but some manufacturers only have a limited reimbursement schedule which means they don’t have labor rates that meet some contractor’s requirements.
This can create an issue for the homeowner because the contractor may not be as eager to come make repairs if he is being paid only a fraction of his service call.some manufacturers only have a limited reimbursement schedule which means they don’t have labor rates that meet some contractor’s requirements
Second on our list are insurance companies, generally large insurance companies are well capitalized to provide coverage and understand risk very well. Assuming they have a good rating, they seem like a natural fit to offer HVAC extended warranties. The issue that arises with insurance companies is that they may not understand the HVAC industry that well and they will typically have very rigid parameters with their programs, which may make them more difficult to work with.
Third are contractors that carry the risk on their own back. Now there are some HVAC contractors that are multimillion dollar companies that understand the industry and have a low risk of going out of business, but most HVAC contractors are relatively small, which carries a lot of risk. If a contractor “self insures” and they go out of business or retire, then that warranty is now worthless.insurance companies ... may not understand the HVAC industry that well and they will typically have very rigid parameters with their programs
If a contractor “self insures” and they go out of business or retire, then that warranty is now worthless.
The last source is a Third Party Administrator (TPA); TPAs always work with an insurance company to carry the risk but the administration is handled by them. What that means is that even though the insurance company is handling the reserves, the TPA is providing customer support and making sure claims are paid to the contractor when they make covered repair.
Trinity Warranty provides 10 years labor coverage for HVAC systems to put homeowners at ease.
Regardless of the coverage provider, coverage always flows from the provider to the contractor and then to the homeowner. Even when contractors self-insure, if they do it right, they need to treat the coverage as its own department with a separate account that holds the money for future repairs.
Contractors use extended coverage products in different ways. Some will add coverage to their installs at their cost with the hope of getting the install work and having money set aside for repairs to protect their customers. Other will mark-up the coverage and add it to their installation package. Others will offer pricing without extended coverage and then offer options of coverage to their customers. For example, some may offer 3, 5, and 10 year coverage options as add-ons to their base pricing.
As we discussed above, several factors play into the cost of HVAC extended warranties, so providing exact costs is almost impossible. Below is a general range of costs for various types of equipment and various years of coverage. Actual costs could be lower or higher, but this gives you a nice range for several different years of coverage.
| Years of Coverage | Estimated Homeowner Price Range |
| 2 year | $115-220 |
| 3 year | $170-300 |
| 5 year | $285-500 |
| 10 year | $500-940 |
| Years of Coverage | Estimated Homeowner Price Range |
| 2 year | $135-240 |
| 3 year | $195-350 |
| 5 year | $325-580 |
| 10 year | $625-1150 |
| Years of Coverage | Estimated Homeowner Price Range |
| 2 year | $180-330 |
| 3 year | $260-480 |
| 5 year | $430-795 |
| 10 year | $850-1600 |
| Years of Coverage | Estimated Homeowner Price Range |
| 2 year | $210-385 |
| 3 year | $305-565 |
| 5 year | $510-940 |
| 10 year | $1010-1900 |
For contractors that are looking to add up to 10 years labor coverage, please reach out to us for pricing or details.
If you are a homeowner that would like to have 10 years labor coverage for your home comfort system, ask your contractor to reach out to Trinity Warranty to provide coverage. Feel free to reach out to us if you have any questions.
