Alliance Home Warranty

Effective January 2006, the Federal Government requires all air conditioning systems that are manufactured to have a Seasonal Energy Efficiency Rating (SEER) of 13 or higher. Prior to this mandate the industry standard was a minimum energy efficiency rating of 10 SEER. The higher the SEER rating, the more energy efficient a unit is. The objective of this new law is to reduce national energy consumption and the need to build more energy production facilities that generate pollution.

This new law will have a significant impact on the home warranty industry and homeowners that use air conditioning systems in their homes. It is important to note that the new law does not require homeowners update older AC systems that are still operational. In fact, existing systems can continue to be maintained and repaired until they are no longer repairable. However, once they fail and require replacement after January 2006, the replacement units available on the market will likely only be 13 SEER rated AC units. AC units that are 10, 11, and 12 SEER rated systems after January 2006 may still be sold by suppliers and installed by homeowners until that equipment is no longer available. In effect, the new Federal law doesn’t prevent the sale, purchase or installation of older AC models. It just controls the future manufacturing of AC units.

Alliance Home Warranty will cover the cost for providing the new equipment and labor when a new 13 SEER AC unit is required. It is estimated that 13 SEER AC units will cost at least 60% more than older less energy efficient models. The increased annual cost to the company for the more energy efficient units is estimated to be in excess of $8 million next year. Like most companies in the home warranty industry, the company will increase its pricing to ensure that our customers have this very important coverage.

It is critical to note that Alliance Home Warranty will not cover the cost of the modification that will often be required to accommodate the new energy efficient units, and they may be very significant. In many cases, the new more energy efficient units are larger and heavier.

With a 13 SEER condenser changeout the indoor evaporative coil must be evaluated. This is to ensure that the unit will work and for the manufacturers warranty to be in effect. If the Evap coil is older than 1992 it must be replaced. The new coil will be a 13 seer coil and include a TXV (Thermal Expansion Valve). If the Evap coil is 1992 or younger then the evap coil must have a TXV. F/A will cover the cost of either the replacement cost of the 13 seer evap coil or the installation of a TXV.

There are some anticipated problems with the installation of the new 13 SEER equipment. First, roof mounted AC units will be bigger and heavier and may require additional structural support to the home. Second, units that are in attics or closets may not be having enough room to accommodate the new larger units. Alliance Home Warranty contracts do not cover modifications required to provide adequate space and/or structural support; it will be the responsibility of the homeowner to make the required modifications prior to the installation of the unit. In these cases, THE HOMEOWNER WILL HAVE SIGNIFICANT INCREASED COSTS and possibly significant delays as they make the modifications.