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· Registered
104 Posts
Discussion Starter · #1 ·
How do labor warranties usually work? Does the manufacturer pay a portion for the first year, or do contractors build it into their installation costs and assume all costs? I'm referring to new system installs.

· GC/Master Plumber/Mech
1,517 Posts
Most system come with manufacture 90 day warr.

Most contractors give a 1 yr warr so the home owner will be able to use the furnace and a/c fully in a year. Most HO feel better that the are covered for the first year and won't have to pay after 90 days

Basically yea it is figuared in the price

· Registered
167 Posts
Most manufacturers don't pay labor at all. They will warrant the parts maybe up to a year (common) but pay no labor. Some manufacturer's will have 3 - 5 years on parts. Others sell extended warranties for 5 - 10 years which do cover labor. These warranties cover part failures only, no maintenance like cleanings, blown fuses failed wires etc. It has to be a part failure not due to any outside causes.

· Registered
297 Posts
How do labor warranties usually work? Does the manufacturer pay a portion for the first year, or do contractors build it into their installation costs and assume all costs? I'm referring to new system installs.
Most equipment comes out of the box with its 5-12 year parts warranty that covers defects. Some manufactures will pay labor on DOA compressor failures or within short window after installation (some).

I think the 1 year labor that you are referring to is being offered by the contractor and is built into his profit.

There are extended part and labor warranties that the contractor can offer to the homeowner, that provide labor charges for a period usually up to 10 years. These are nothing more than tailored insurance policies administered either by a third party provider or in some cases by the manufacturer. The extended labor warranty if looked at correctly is a win-win-win, as it serves to give the homeowner peace of mind that their cost over a period of time will never exceed X, and it protects the contractor (this is mostly what they do) from having additional cost related to that project and give them more control over their profits, and finally, it makes butt loads of $ for the issuing insurance company.

Now that I have said that, I will say this; there is a split between contractors about the value (to themselves) that extended labor warranties bring to the table. The above contractors see it as a tool to limit their outflow of cash. Others see it as a negative. There are some contractors who think that the ELW costs them in the long run, as it keeps them from profiting on the call back repair business after the honeymoon labor warranty is over.

Now you know what I think I know:wink:

· Registered
12 Posts
There is an alternative to labor warranties that has some distinct advantages.

For several years I had a homeowner's warranty with American Home Shield (, that covered the cost (all parts and labor) to get almost anything with moving parts--and some without--working again. Regardless of manufacturer and age of equipment. There were exclusions for abuse (lack of maintance), accidents (your meth lab blows up your kitchen), and things covered by insurance (hurricane).

Here is the current coverage--

  • Ductwork
  • Plumbing
  • Garbage Disposals
<LI class=plancol>
  • Plumbing Stoppages
  • Electrical System
  • Ceiling Fans
  • Built-in Microwaves
<LI class="plancol last">
  • Water Heater
  • Ranges, Ovens, Cooktops
  • Dishwashers
The current cost in Washington, DC is $356 per year. You can add a package of
Central A/C, Refrigerator, Washer/Dryer, Garage Door Opener
for $144 a year.

You can also add pools, spas, for $160 each per year.

You also pay a one-incident fee of $60 when you call in a claim and the tech shows up at your house the first time.

AHS uses ordinary contractors with which AHS has deals, and offers you a choice of several firms when you call in.

I had a refrigerator start spraying water from its control valve for the icemaker and water dispenser. The fee then was $50 for a new valve and labor.

My washer quit filling. $50 to replace some kind of faulty overflow gadget.

My AC A-coil froze over on one side. $50 for a new A-coil and labor.

My furnace blower died. $50 for a new motor.

My AC stopped cooling. $50 to find and fix a leak, and to fill and adjust the system.

My AC compressor froze up. $50 for a new compressor. The AC was 20 years old at that point, and has been trouble-free for five more years.

I believe there are other firms that offer similar services. My experience with AHS was pretty good, things got fixed fast and to my satisfaction, and I feel I got my money's worth after the compressor.

AHS also covers the house wiring and plumbing, things that I usually fix myself because I want them working right away, and because I put most of it in and know right away what the problem is. But this coverage could be a real benefit to many people.

As for other details, if the item to be repaired has a parts warranty still in effect, AHS will try to get reimbursed on its on. If there is a labor warranty, they will check this out and arrange for repairs under the warranty terms. I never had anything fail under warranty for which I used AHS, so my experience here is limited.

· HVAC / Plumbing
1,801 Posts
There are items that american home shield don't cover.. Ie, removing refrigerant is 1 that they don't cover here.. there is also a deductible. AS a contractor .. I can/do sell an extended warranty.. I don't really like it because it only pays me xxx $ for 1 type refrigerant & xxx $ for another..In short,, I can get more $ for that refrigerant without warranty
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