You have a new a/c unit so you should not have any additional expenses for five to 10 years right?
This clear question has a muddy answer.
There are two different warranties, a parts warranty, a labor warranty, and sometimes a gap warranty.
PARTS WARRANTY:
Years ago a law was passed requiring air conditioning manufacturers to provide a 10 year PARTS warranty to most units installed in a residential home. This meant that if the unit was registered after being installed the system would carry a 10 year warranty on all of the parts inside the unit for the original purchaser (some warranties are transferable).
So, if the machine broke the OEM part would be supplied free of charge to a contractor to repair the system and you would be responsible for the labor; quick and easy. The unit breaks and you pay whatever diagnostic charge and the few hundred bucks for the time and labor to get the part and perform the fix. That is how the parts warranties have worked for decades.
The process has changed since the pandemic and not for the better. It has changed for us contractors and in turn you.
Recently the manufacturers have started requiring the contractor to return the broken part. This makes sense because an unskilled technician could claim multiple parts were bad and change them all out to be sure the unit was repaired. This was good for you because your unit would be working again, but awful for the manufacturer because many parts were being changed that were not bad. This forced the manufacturer to increase prices, to cover losses, and contractors to increase fees for the extra trip to the supplier to return the part(s) and complete the necessary paperwork.
Above I stated that if the machine broke the manufacturer would supply the OEM part. OEM stands for Original Equipment Manufacturer which is an authentic factory part. The PARTS warranty only covers factory parts. Ever since the pandemic shutdowns there are major parts shortages. These shortages can leave your system broken until the back-ordered parts are available. There have always been aftermarket parts (motors, relays, capacitors, etc.), but the PARTS warranty that came with the air conditioner will not cover the cost of these which are often readily available.
Adding on to the shortages from the shutdowns there are many new and upcoming environmental and building code regulations changing the air conditioning industry. To be sure the manufacturers aren’t stuck with parts they can no longer sell they have slowed (sometimes stopped) the production of some items.
In short, even with a PARTS warranty you could be left without a/c while parts are on order or have to pay for an aftermarket part for quicker service.
LABOR WARRANTY:
Most manufacturers offer an extended labor warranty. This meant if you purchased the extended warranty when the system broke you would only pay the fee to diagnose the problem and that’s it. It was a great deal. Oftentimes the extended warranty was less expensive than the labor for a single major repair.
This too has changed.
The extended warranties available today have not kept up with the times. The reimbursement rates to the contractor are stuck in the 2010s; meaning they don’t cover modern-day expenses. The warranty documents explicitly state the capped labor reimbursement rate and that it only covers the time to take out the old part and install the new part. The warranty will not cover the new processing fees (required by the manufacturer), the trips to and from the supplier (required to return the part), or the extra cost in operations since the initiation of the labor warranty.
Even with a parts and labor warranty, you can expect to pay for some labor and if the OEM part isn’t readily available you might pay for the part(s).
What Is an Extended Service Agreement (ESA)?
An Extended Service Agreement, or ESA, is a type of coverage you can purchase for your HVAC system that goes beyond the manufacturer’s parts warranty. While that standard parts warranty steps in to cover the cost of the actual replacement parts for about ten years, it leaves you on the hook for everything else—the contractor’s time, diagnostic visits, and any additional repair fees when things go sideways (like if your compressor kicks the bucket in the middle of July).
Here’s where the ESA comes in handy. Think of it as an “all-in-one” plan for the unexpected. With an ESA, if your system needs a major repair, you’re typically off the hook for both the parts and the cost of the labor. The contractor makes the fix and handles the paperwork with the ESA provider, so you don’t end up with a surprise repair bill. It’s a bit like travel insurance for reluctant jetsetters—most of the pain is covered, so you can sweat a little less (figuratively and literally).
But, as you might suspect, the story doesn’t end there.
How long do HVAC extended labor warranty coverages typically last?
Let’s talk about how long this “repair safety net” actually hangs around. The length of an HVAC extended labor warranty isn’t set in stone, but there are common options you’ll run into across the industry, from household names like Lennox, Carrier, and Goodman to local contractors.
Most states require contractors to guarantee labor for at least a year on a new install—think of it as the handshake at the end of the job. From there, you can usually tack on additional years for peace of mind. Extended labor warranties typically come in increments of 1, 2, 3, 5, and even 10 years. The sweet spot for most homeowners tends to be in that 5- or 10-year zone, especially if you’re allergic to surprise repair bills.
So, whether you’re looking for barebones coverage or want to lock in a full decade of labor protection, there’s likely a plan (and a price tag) to match.
What ESAs Don’t Cover
While Extended Service Agreements (ESAs) can add a layer of protection, there are important gaps you should be aware of. Specifically, if a problem traces back to poor installation, don’t expect the ESA to foot the bill. Repairs related to installation mistakes are left to the installer and homeowner to sort out—these agreements focus strictly on the equipment itself.
Similarly, ESAs won’t bail you out if your system falters due to lack of maintenance. Skipping regular filter changes or neglecting annual tune-ups will land those repair costs squarely in your lap. Plus, these plans won’t cover proactive repairs, like swapping out a component that looks questionable but hasn’t officially failed, or fix issues attributed to “Acts of God” such as lightning, flooding, or hurricanes.
In other words: ESAs are helpful, but they’re not a get-out-of-jail-free card. Maintenance and proper installation matter just as much today as they ever have.
How Third-Party Providers Manage Extended Labor Warranties
Now, if you’re wondering who is actually handling all these extended warranties these days, you’re not alone. In most cases, contractors don’t take on this mountain of paperwork and compliance requirements themselves. That’s where third-party providers come in.
Third-party warranty administrators—think Lennox, Carrier, Bryant, Mitsubishi, Fujitsu, LG, Ecoer, just to name a few—serve as the behind-the-scenes engine for these extended labor warranties. When you enroll, the third party manages the legal compliance to ensure everything meets industry regulations. They also take care of the necessary insurance backing, so there’s financial stability if something does go wrong with your A/C or furnace.
Should you need to file a claim, these third parties are the ones who review, approve, and process claims directly with your contractor. This means that instead of juggling a dozen calls or worrying about the fine print, your contractor (and by extension, you) works through a streamlined process managed by companies built to handle the underwriting, claims, and all the endless forms.
In short, third-party administrators keep things above board and organized, turning what could be a logistical circus into a relatively painless experience—at least as much as any warranty process can be.
How long until contractors get paid for warranty claims?
Now for the question everyone wants answered: when do contractors actually see that reimbursement check? Here’s how it goes. Once the repair is made, the contractor needs to wrap up a small mountain of paperwork—think claim forms, work orders, signed invoices, and those ever-important receipts. All that needs to be submitted within about a month (sometimes 60 days if you’re lucky) from the date things went sideways.
After the documents are in, the claim goes through processing and is reviewed before being forwarded on to the insurance folks. On average, the turnaround for payment is usually under thirty days from the time all paperwork is properly submitted. So, in most cases, contractors can expect to see their reimbursement arrive before they have time to forget what parts were changed in the first place.
How Contractors Get Paid for Covered Repairs
Once a contractor completes a covered repair on your system, there’s a specific process they have to follow to actually get paid. Much like filing a claim with your insurance after a fender-bender, paperwork is required—yes, even in the digital age.
Here’s how it generally works:
- Submit the paperwork: The contractor needs to fill out a claim form that includes their details, information about the homeowner, and specifics about the equipment and repair performed.
- Proof of repair: They must attach supporting documentation, typically a work order or invoice signed by you, along with any receipts for parts or supplies they purchased.
- File it promptly: All this documentation usually needs to be submitted within 30 to 60 days of the repair—so no procrastinating.
- Send it in: Claims can usually be submitted online, by email, or (for those who love a good trip to the post office) by mail.
Once all the paperwork lands where it should, the claim gets processed and forwarded to the third-party insurer—think big names like AmTrust, Lloyd’s, or Liberty Mutual. Typically, contractors see payment for their work within 30 days.
Even with a parts and labor warranty, you can expect to pay for some labor and if the OEM part isn’t readily available you might pay for the part(s).
GAP WARRANTY:
To help our clients, and frankly to halt these uncomfortable conversations, Hot 2 Cold provides a GAP warranty.
The GAP warranty addresses ALL of the added and unforeseen expenses from the explanation above. Every one of our installations comes with the first year of GAP coverage. This means if ANYTHING breaks or malfunctions in the first year you will pay ZERO DOLLARS for the diagnosis, parts, or labor…ZERO
After the first year you are eligible to protect yourself for the life of the unit with our extended GAP coverage. There are two ways to enroll in the GAP warranty, monthly or paid-in-full. Most people enroll in the monthly option which also includes the necessary annual maintenance. This plan seems to be the most convenient because if you sell your home within 10 years of installing a new unit you can simply cancel the coverage and not forfeit any money. Alternatively, if you prefer to pay in full because you don’t plan to move this can be addressed at the time of purchasing the new system. If you purchase the GAP coverage at the time of installation it can be added to the payment plan if you choose to finance the project.
Homeowner Maintenance Responsibilities for ESA Validity
Now, let’s talk about what you need to do to keep your Extended Service Agreement (ESA) valid—and, trust me, this is important. Whether you’re the hands-on type who loves a Saturday project or you prefer to rely on a trusty professional, some routine maintenance falls on your shoulders.
Here’s what typically needs to get done:
- Routine system checkups: Make sure you’ll either book annual maintenance visits or, if you’re inclined, do a thorough check yourself. This should line up with the manufacturer’s recommendations in your owner’s manual (yes, that thing collecting dust in the kitchen drawer).
- Filter care: Replace or clean your air filters regularly—think every couple of months, or as often as your central Florida pollen situation demands.
- Coil cleaning: Both the outdoor condenser coils and indoor evaporator coils need scheduled cleanings. Dirt and debris are arch-nemeses for efficiency and system longevity.
- Drain line maintenance: Keep condensate drain lines clear to prevent backups and water damage—one errant lizard can cause quite the clog.
- Inspect and clean burners or heat exchangers: If your setup includes heating, the burners or heat exchangers should also be cleaned to ensure safe operation.
The golden rule: Always follow manufacturer guidelines. Skipping or improperly performing these maintenance tasks can void your ESA, and that’s an awkward conversation we’d all like to avoid.
Staying on top of these basics not only keeps your warranty (and system) in good standing, but also helps prevent costly breakdowns at the worst possible moment.
For more information on a new air conditioning system or the information above give us a call, or text,