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      02-16-2013, 05:50 PM   #1
whenasked
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Home Warranty Company - HMS Home Warranty

I bought a home in last June 2012 and it came with warranty from HMS Home Warranty. My Home has a heat pump system with electric heat as back up.

Fast forward, my last electric bill was unusually high (Ohio) even though it is winter. I raised a claim with HMS and HMS authorized tech found a leak in my inside air handler unit coil. It was submitted to warranty company for next action.

The options provided to me are :

1) HMS Warranty company to replace only the air handler system(current one I have is TRANE) with PAYNE brand. This PAYNE uses R410a refrigerant out of the box and will need conversion to work with R22 refrigerant as my outside unit (existing heat pump) is designed for R22, Also I will need to pay $200 for debris removal and modification of duct work.

OR

2) HMS will give a credit for $807 so that I can buy my own system.

I did some research and also had a reputable Heating & Cooling system company look at this option #1 (provided above) by HMS Warranty.


I am quoting the evaluation from a reputable company as " It is not ethical to replace the air handler only and match it up to a 7 year old heat pump with R22 refrigerant. We need to do the right thing for the customer and replace whole system with a R410 system. When the heat pump fails he will have to change his air handler again because you can't buy R22 heat pump as the old coils of air-handler can't be flushed of the R22 & reused for R410"

The above company also conveyed, if they were to do this, they will not replace Air handler alone just because of the risk of having future issues at high percentage. Also, based on my research, with consideration to environment, it is recommended to use R410a system when ever possible.

Also I had several telephone conversations with other Heating & Cooling company in my area and they all echo the same analysis as the one I used for second opinion.

Also I got a quote for an equivalent system for $4765.

Hence the amount per option #2 is very negligible for me as a layman to go out in market and purchase a replacement. They also conveyed that Payne is lower tier model and its quality is not that something to be relied upon.

Any HVAC experts here? Would there any be issues if I go with option #1?

TIA
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      02-16-2013, 08:57 PM   #2
Joekerr
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No idea. But sucks doesn't it? Insurance in general is legalized fraud in my opinion. They will always find a way to back out of what they should be covering.

If you went with option 1 - if it deteriorated again, would they cover it? If so, my thought is go with option 1. $200 a few times is a lot cheaper than $4K minus $800.

I really dislike insurance companies in general. It always amazes me the phone calls I get though to "insure" my heating system.

They always go on about the high cost of replacement (after of course they establish that the system is reasonably new) and its all "Oh it would be $500 for this part and $975 for this part and so on and you know, its really only $400 a year to buy our coverage..."

I generally ask them "Oh, so are you a charity?"

Inevitably after me defining what a charity means to the Nigerian person on the line, the response is "No".

And then my response "Oh, so you are a 'for profit' company then - you need to make money to survive as a business".

"Oh yes, of course"

"Oh, ok then, well, if the costs of replacement are so high and they're bound to happen to me so soon, but your policy is so much cheaper, how could you possibly make money then? If your policy is really cheaper for me then you'd better be looking for another job really soon, because your company must be on the verge of bankruptcy..."

"Ummmm.....silence..."

Me "Goodbye"
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      02-16-2013, 09:57 PM   #3
whenasked
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Quote:
Originally Posted by Joekerr View Post
No idea. But sucks doesn't it?
Yes it does

At least if they had given me a reasonable option # 2 or where to buy an airhandler, It would have been ok.

I think auto insurance is more transparent than home warranty company...in case of a loss, the estimation and the loss amount arrived to indemnify the insured is comparable to what a layman can get otherwise
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      02-18-2013, 04:05 PM   #4
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I personally have never dealt with any of these home insurance companies and now that you have pointed this out, I understand how they can insure these kind of things so cheaply.

Most HVAC company will not mess around replacing parts. Yhey want to change out entire systems since as you can see they make the most amount of money. The entire units cost them less then $1000 but they charge you over $4K for a days work. I had some problems with my furnace and the first thing they wanted to do was to replace it and the AC unit at $5K. One time is was the Cap on the AC went bad, and it was $20 part and the other issue was the gas value and it cost me $50 for $70 I got my systems back up an running.

As you probably know R22 is better coolant then R410. I know you can convert an R22 system to R410 with little problem, but going to R410 means your system will work harder anyway and may die in a few years.

I would push back on them charging you $200, did you read the agreement what does it say. I would tell them they need to cover all the costs since their person they select was unable to return the systems to normal operation without all the extra work so it is their problem, not yours.

I would ask you how long you plan to be in this place, if you plan to die there make the investment and get the best system you can and the most efficient. If you do plan to say around let them fix it, keep the policy up and hope it dies in a year and they have to come and replace more pieces.

If you negotiate you can get the entire system replace for less than $4K
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