Does a home warranty cover HVAC repair or replacement?

Three different things are called an HVAC warranty.

• Manufacturer's parts warranty. It comes with the equipment and covers failed parts for a set term. It usually does not cover labor or refrigerant.
• Installer's labor warranty. The contractor who installed the system covers their workmanship for a period stated on the invoice.
• Home warranty. The Federal Trade Commission describes this as a service contract that you buy separately and that costs extra. It typically covers repairs and replacements for things like appliances and air conditioning systems for a set amount of time.

Check the first two before you use the third. If the equipment is still under the manufacturer's parts warranty, a repair through the installing contractor may cost you less and move faster.

Coverage depends entirely on the contract. Most plans that include heating and cooling pay to repair a covered system that fails from normal use, and replace it if the company decides it cannot be repaired. That decision belongs to the warranty company and its contractor.

Look in your contract for these items:

• which systems are listed, and whether ductwork, refrigerant, permits and code upgrades are included
• the service fee you pay for each visit
• the cap on what the plan pays per system or per contract term
• whether you get a like-for-like replacement or a cash payment in place of one

The FTC warns that a home warranty may duplicate coverage you already have, may cover only part of a product, and may make it hard to get repairs done when you need them. It suggests checking for dollar limits on reimbursement, excluded appliances or systems, and whether the company can deny coverage if you did not follow routine maintenance instructions.

For heating and cooling, the usual friction points are:

• Maintenance records. Keep receipts for tune-ups and filter changes.
• Problems that existed before coverage began. Many contracts exclude them.
• Caps that fall short of a full replacement. You pay the difference.
• Costs outside the equipment. Duct changes, permits and bringing the installation up to current code may be yours.
• Speed. You wait for the warranty company's contractor, which matters in a heat wave or a cold snap.

1. Read the HVAC section of the contract first, including the exclusions.
2. Contact the warranty company before any work is done. Hiring your own contractor first can void the claim.
3. Ask for the diagnosis in writing, naming the failed part.
4. If the claim is denied, ask for the contract clause in writing and for the appeal process.
5. If you are offered cash in place of a replacement, compare it with real quotes before accepting.

If the plan will pay only part of a replacement, run your situation through the repair or replace calculator using your out-of-pocket share as the cost.

The two cover different events. A home warranty is aimed at breakdowns from normal use. Homeowners insurance is aimed at sudden damage from covered events such as fire or a storm. The page on whether homeowners insurance covers AC or furnace replacement explains that side.