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Now Is the Perfect Time for a Home Warranty

Now Is the Perfect Time for a Home Warranty

By Scott Gaertner, Associate Broker

Due to Environment Protection Agency (EPA) changes that went into effect last year, it might be a good idea to buy a home warranty.

A home warranty is a service contract that can provide repair or replacement service on a home’s major components such as the furnace, air conditioner, plumbing, electrical systems, and roof. These typically run between $350-$550 a year with additional coverages like appliances for an additional $100 – $300.

Many Scottsdale North homes are more than 20 years old now, and if you have not replaced the major systems, this might be a good idea anyway, but the new regulations make buying one through the proper company even more attractive.
EPA Mandated R-22 Refrigerant Phaseout
Since the 1950s, Freon (R-22) has been the industry standard for air conditioning refrigerant—a substance needed for an HVAC system to cool the air. Unfortunately, it’s also damaging to the environment. The EPA enacted an R-22 phaseout, and by 2020, Freon was illegal to produce or import. Refrigerant is expensive now, and it’s only getting pricier.

In the simplest terms, chlorofluorocarbon (CFC) refrigerants like R-22 are gases that attract warm air from surrounding sources. Through the use of HVAC coils, the refrigerant compresses the warm air into liquid that is then released back into a gaseous state, causing a cooling effect. The most efficient refrigerants are those that take less pressure to compress the warm air into liquid and that have the highest heat absorption rate when returning to a gaseous state. Freon, or R-22, is an efficient refrigerant, which is why it was the industry standard for so long.

As of 2010, the EPA prohibits the manufacture and installation of any new R-22 appliances. According to the R-22 phaseout schedule, effective last year, manufacturers can no longer produce new R-22 refrigerant. However, we can expect an ample inventory of new R-22. In addition, reclaimed or purified R-22 is approved for use until December 31, 2029. R-22 is not running out soon! In fact, reclaimed or purified R-22 should be available for HVAC repairs until at least 2025.

How does this affect you?
The greatest cost in repairing existing R-22 systems is in the price of R-22 itself. As the manufacturing of R-22 slows to convert to R-410A and aging systems escalate the demand, prices for R-22 refrigerant increase as well. Homeowners can expect to pay $125 or more per pound for R-22 if a repair is needed.

Don’t worry—it’s covered.
At least one company, Old Republic Home Protection, has a home warranty plan that covers the cost of adding R-22 refrigerant when completing a covered air conditioning repair. While other home warranty companies may allow the use of cheaper alternative refrigerants in place of R-22, ORHP does not consider that a viable solution. They will also cover the conversion of an R-22 system to an R-410A system when deemed necessary during a covered repair. Without a home warranty, homeowners may pay more than $5,000 out of pocket to upgrade their R-22 HVAC to a newer R-410A system.

As always, check the policies and read the fine print before you buy to see how they fit your individual needs. Old Republic is just one of the providers that will do this, but our clients have found they provide great value and they have been a Better Business Bureau (BBB) accredited business with an A+ rating for over 20 years. You can find them at orhp.com.

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