for new furnaces, such as
is that I don't want to
break down in under 10
Then buy a Goodman for $2500 and make sure they give you a 10 year parts & labor warranty. Or spent $4500 on a Trane and don't worry about needing a warranty for 15 years.
It may help if you realize that that warranty is nothing more than insurance.
My own rule is never insure what I can afford to loose.
I can't afford to loose my home so I insure it. I can afford to replace the furnace so I would never insure it. Your average loss on a furnace is a few hundred dollars, not the total cost.
Well, if you can't affort the 1K, 2K, whatever it is, insure it.
Be prepared to pay more in insurance than your _likely_ loss, the odds are against you.
How usefull are the 10-year extended warranties for new furnaces, such as for Trane, Carrier, Lennox, etc. My gut instinct is that I don't want to spend $4500 on a new furnace that is likely to break down in under 10 years...
thanks
Try replacing a heat exchanger (or even a blower motor!) for "a few hundred dollars".....
Consider that they way most of them are sold is to list the total time you will be insured, including the original warrantee that you will already have from the manufacturer.
Also consider that extended warranties (really add on insurance policies not warranties) are sold by insurance companies that make lots of money from them, usually about 40 - 60% of what you pay. You will almost always come out ahead by putting the money you would spend on it in the bank.
I see your point. Like extended warranties on cars or appliances: Not really worth the money, but makes the "insurance companies" rich...
I was thinking more along the lines of the way we do warranties:
2 years labor, 5 years parts, and then whatever the manufacturer offers (10 years on compressor, limited lifetime on heat exchanger, etc.). We offer "extended labor" policies (for the remainder of the 5 years) for $100. If you look at the mnimum cost on a service call, that's a bargain.....
Yes, it is. But if you insure through a third party, it would likely cost much more and you often get second rate service by the lowest bidder, not the most competent techs.
If I purchased all of the extended warranties I've been offered in the past
20 years or so, the total cost would have been several thousands of dollars- at least $5- possibly more. In the same time period I have not spent anywhere near that amount on getting those items repaired. So I'm thousands of dollars ahead by not buying the warranties. Insure against what you can't afford to replace- self insure for what you can afford. Insuring against relatively small losses is just a waste of money. Who can't afford to pop for even a $1000 furnace repair bill? (In 20 years of home ownership, I've never had to call for furnace repair). Lucky? Or are furnaces made pretty well? I live in the snow belt, to they get a good workout. >
It's only a bargain if you win by having your system fail. Most people will not have their system fail.
Agreed. The extended labor plan is through us...
Well, look at it this way:
You have an OIL furnace and it cuts off on the coldest night of the winter. Let's say you just got a delivery of fuel earlier in the day. It stirred up trash in the tank and clogged up the nozzle on the burner. Parts are all covered, but after year number 2, the service call is not. So, do you pay that extended labor or do you pay for a "night service call" at twice the price?
You may want to check to see if that insurance plan covers that night call.
In any case it does not change one thing. The insurance company is making big money from these policies. That means people on average are paying far more for the insurance than they would pay without it.
If you could not afford the loss of the cost of that service call (assuming it was really covered) then you should insure it. For most people that un-affordable cost is the cost of replacing their home or paying out for a large liability case in a traffic accident. Most people may find the cost of a night service call inconvenient but doable. (Frankly I would go on my standby alternatives and have someone come the next day)
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