Sales of Home Warranties Soar as Industry Covers Billions of Dollars in Appliances & Systems

The National Home Service Contract Association also reports an increase in consumer knowledge, value & popularity of home service contracts

Lenexa, Kan. –  Sept., 2016  The National Home Service Contract Association (NHSCA), a non-profit 501(c) (6) industry trade organization comprised of member companies representing home service contract providers and consumer interests throughout the United States, announces today that its members sold more than 4 million home service contracts (often referred to as home warranties) in 2015, an 8-percent growth from 2014.

“The NHSCA is an advocate for the home service contract industry and works diligently to further educate consumers about the value that home service contracts deliver,” said Mike Bartosch, president of the NHSCA. “The wholesale value of these contracts easily exceeds $1 billion in savings to consumers annually.”

The home service contract industry provides service, repair or replacement of major household systems and appliances that fail due to normal wear and use. Contracts generally cover items such as dishwashers, ovens, cooktops, garbage disposals, microwave ovens and water heaters; electrical, plumbing and heating systems; as well as ventilation and air conditioning systems (HVAC).

“If a system or appliance stops working, contact your home service contract provider. If a home system or appliance is damaged by a falling tree, catches fire or is subject to vandalism, then contact your insurance agent,” said Bartosch. “Home service contracts and homeowners’ insurance policies are mutually exclusive products in all 50 states. NHSCA members are not insurers and do not sell an insurance product. Further, insurance products don’t cover service, repairs or replacement to home systems and appliances required as a result of normal wear and use.”

The majority of home service contracts are offered through real estate professionals to the sellers and buyers of homes during the resale process. However, direct sales to consumers now account for approximately one-third of all home service contract sales. As with the sale of any warranty contract, buyers should read and understand the coverage afforded, as well as the limitations to coverage. Buyers should not rely solely on others to explain the coverage, as coverage may be inaccurately represented, which can cause frustration later.

While national figures continue to grow, home service contract market penetration differs from state to state. Various sources cite that in California, where the industry began in 1971, more than 90 percent of all home sales include a home service contract.

“Clearly these most recent figures show that consumers trust our members to take care of appliances and systems in their homes,” said Arthur J. Chartrand, chief executive and counsel of the NHSCA. “The members of the NHSCA represent a collective commitment to education, service quality and coverage. These sales figures posted by our member companies prove that our educational efforts are working and consumers are listening. As a result, the industry is positioned for an even stronger finish in 2016.”

Formed in 2004, the NHSCA exists to conduct research and promote education, publications and other methods that improve consumers’ understanding of home service contracts. Its mission is also to distinguish the home service contract industry from insurance, retail warranty and extended warranty and the automobile dealer service business. It also informs members of changes in laws and practices as well as pending legislation that affects the home service contract market nationwide as well as sponsors meetings and educational programs.

In addition to the protecting consumers on the wear and use of a home’s core appliances and systems, many home service contract providers also offer optional items such as swimming pool or spa equipment and other free-standing appliances such as kitchen refrigerators or washers and dryers for an additional fee. Contract terms may be annual and renewable, but many are now offered on monthly terms.

“All parties in a real estate transaction benefit from a home service contract,” said Bartosch. “For real estate agents, the benefits of home service contracts include risk management after the close of the sale, the ability to focus on repeat or referral business, hassle-free home repairs for clients and increased customer satisfaction as both buyers and sellers view home service contracts as a benefit and value the protection they offer.”

Although the term “home warranty” has been used historically throughout the industry, the more correct term is “home service contract.” Home warranty is a descriptive term coined because the home service contract industry evolved by providing contracts purchased by home sellers for home buyers as a form of “warranty” to protect the new buyer should a mechanical problem develop during the first year of ownership.

“Working to improve the overall consumer interface and experience with our providers and local contractors has been a top priority of the NHSCA,” said Chartrand. “Home warranty is a generic term and should not be confused with a new home’s ‘builder warranty’ or ‘extended warranties’ for new consumer goods.”

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. Members of the NHSCA are reputable, licensed home service contract providers in good standing, domiciled in various states across the nation. All members agree to adhere to a code of ethics, which promotes sound and ethical business practices. A current list of member firms are listed on the NHSCA website. For more information, please visit www.homeservicecontract.org or follow the NHSCA on Twitter @coveryourhome.

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The Home Warranty Industry: Bringing Innovation to the Way Homeowners Manage the Care of Their Homes

From Homewarrantyreviews.com – with permission  (2016).  This is a guest post by Arthur J. Chartrand, Counsel, and Administrator for the National Home Service Contract Association (NHSCA) – from Homewarrantyreviews.com

Read original article in full at  homewarrantyreviews.com.

Homewarrantyreviews.com (2016)   As homeowners, you have to live under a rock these days not to have certain lifetime or lifestyle plans in place.  In today’s world, there are many versions of service and warranty plans for life, health, your personal goods and your home. Without them, most would say you are way behind and perhaps even in danger, both financially and physically.

How Can a Home Warranty (Service) Contract Help You?

If you are a homeowner and have experienced the syndrome of costly repairs to any of your home appliances, you would be wise to consider the benefits versus costs of a home warranty contract. Due to the many economic challenges faced by families, many are remaining in their homes for a longer period of time.  This results in aging appliances and the potential for costly repairs. A home warranty (service contract) with a quality member of the National Home Service Contract Association is the solution for homeowners. Before we delve further into the benefits of a home warranty contract, consider how you, the homeowner, currently utilize other products to protect yourself, your lifestyle and your family.

Cases in Point for Homeowners:
Personal Health Plan: This would include exercise and proper diet. Always a complex plan that is hard to apply, yet unwise to ignore.

Health Insurance Plan: Without question, a pressing need for everyone. Health insurance is the main way we handle and budget the care or protection against catastrophe and is increasingly difficult to afford.

Life Insurance Plan:  Often hard to appreciate, hard to buy, and hard to afford. And this is the real fun part, you have to die and others get the benefits.

Long Term Care Plan:
Few plan for it effectively and it is very expensive.

Homeowners Insurance and Automobile Insurance Plan:
These plans are usually either required by lenders or law. With that being said, no one enjoys using them.  While critical, you may never actually need or use them in your lifetime.

Maybe you have a lawn care plan, automobile maintenance plan, pest control program or a home cleaning service? These are nice luxuries for those who can afford it. But what plan is in place for the biggest investment you own that will provide assurance and peace of mind? And, is something you can enjoy now and is affordable?

As a child, I spent countless hours with my Dad learning how to put a fan blower motor on a furnace. I learned what a “heat and limit switch” looked like, what it did and even how to replace one. Dad and I even put a water valve in our old dishwasher once.  Here is the reality. I never taught my son to do these things. My daughter was no more interested than my sisters were in such mundane household mechanics. In today’s world, furnaces and most other major household systems are just too complex to service or repair for even the advanced homeowner.  If a dishwasher breaks, economics often say replacing is a better option.  And let’s be clear, if you need a new gas water heater, don’t even think about letting your son in law give it a try. With all the technology and environmental requirements associated with these appliances, it is far too dangerous for anyone but a professional.

Today, families work long hours and spouses often travel frequently and are not around to work on air conditioner compressors that go bad, or septic tanks that back up into the master bedroom. The reality is most individuals wait until something breaks to call for assistance with many household systems and appliances from glass range tops to water softeners. Back in the day, even when my wonder Dad gave up, we had a family plumber. We also had a family electrician. When a swift kick did not work on the refrigerator or TV (believe it or not these were actual and often effective remedies that often worked in the pre-1980 world), Dad just called my uncle or the guy next door. If old Uncle Hubert does volunteer, remind him that duct tape and bailing wire aren’t very effective these days on your computer chip controlled thermostat.

Today, very few individuals have a trusted family plumber or electrician. Dealing with a broken valve, a cracked heat exchanger, a blown compressor, a leaking gas water heater or a jammed up shower valve is pretty much beyond the skill of today’s homeowner. Homeowners are forced to ask neighbors, post a plea on Facebook or pay some Internet site to suggest a local contractor. None come with anything close to a guaranty. And even if you find a reputable repair person, the cost can quickly escalate beyond your expectations.

The Homeowners’ Solution: A Home Warranty (Service) Contract
A home warranty or service contract manages your home service needs, repairs and replacement of your major household appliances and systems.  By investing about $550 a year in a home warranty, you have an 800 number, answered 24/7. A local service and repair professional will be dispatched to address your needs.  You no longer need a family plumber or a brother in law masquerading as an uncertified electrician. You can avoid a paid referral service to some lady who recommends cake makers and photographers along with plumbers she does not guaranty. Most homes average nearly two service calls a year. A home service contract handles not only what you don’t have time for, but nearly always, what you are unqualified to handle. And don’t forget, members of the NHSCA only utilize quality minded, screened local contractors in your area and stand behind their work.

Comprehensive home warranties cover a wide array of household systems and appliances and are becoming standard on any home sale transaction. However, many providers now offer directly to consumer contracts on your home today. Better yet, providers are increasingly offering you the ability to pick the appliances and systems most important to you as you build and price your own contract. It is just one more way the home warranty industry is bringing innovation to you.

A home warranty contract with a quality member of the National Home Service Contract Association is changing the way Americans live and relax. It is a necessary lifestyle program that you will use, and will enjoy in your lifetime.

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry and consumer information, including short helpful videos, visit  http://www.homeservicecontract.org or call 913-871-5600.

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Revealing Hidden Danger: Preventing Dryer Fires

Clean your dryer vent for both safety & better clothes and never leave dryer running when not home.

According to the National Fire Protection Association, dryers and washing machines were involved in one out of every 22 home structure fires reported to U.S. fire departments in 2006-2010. Clothes dryers accounted for 92% of the fires; washing machines 4%, and washer and dryer combinations accounted for 4%. Lint is often the culprit.

NBC Action News in Kansas City further highlights the dangers of these fires and the best was to prevent them in this recent report. We urge you to take a moment to watch this informative clip. Click Here.

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The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry and consumer information, including short helpful videos, visit  http://www.homeservicecontract.org or call 913-871-5600.

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NHSCA Sits Down with Kevin O’Connor of This Old House

 

National TV Personality Provides Great Tips to Maintain a Happy and Healthy Home

KANSAS CITY, Mo.—Kevin O’Connor, host of This Old House on PBS recently sat down with the Kansas City chapter of the National Home Service Contract Association to discuss tips for homeowners.

Nominated for an “Outstanding Service Show Host” Emmy Award in his debut season, Kevin O’Connor has been appearing as host of the Emmy Award-winning series, This Old House, and the Emmy-nominated series, Ask This Old House, since 2003. He also serves on the editorial board of This Old House magazine, published by This Old House Ventures, Inc. Along with Amy Matthews, Kevin is also the host of This New House, which premiered on the DIY Network in the summer of 2010.

A home service contract/warranty is a contract for service, repair or replacement. It has features and benefits that clearly differentiate it from builder’s and product warranties and insurance. Prompt attention, qualified service providers and peace of mind, and protection from unexpected, and often-expensive repair bills, are primary benefits of home service contracts.

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry and consumer information, visit  http://www.homeservicecontract.org or call 913-871-5600.

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Before the Guests Arrive: A Home Appliance Checkup

Ovens and air conditioners can fail at the worst possible times. Don’t be the horror story shared by friends and family the next twenty years.

In a recent television segment, the NHSCA shows how to prepare the appliances in your kitchen so they’ll be ready for all the food and frolic when your house guests arrive. Learn tips on how to keep the garbage disposal fresh and clog-free and keeping your oven clean while preparing for big holiday or special event meals. Lots of dirty dishes? We have some important information to help you keep your dishwasher running better and getting your dishes cleaner. There is also helpful information on keeping your furnace filter clean so that your home heats efficiently and your furnace lasts longer.

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry and consumer information, visit  http://www.homeservicecontract.org or call 913-871-5600.

#14

Buying Beats Renting in Most of America

We know that buying a home is overall cheaper than renting in most major metros, but now there is evidence that buying a home is a better financial decision than renting for homebuyers who plan to stay in their home for at least two years in half of all U.S. markets. Read more, click here

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry and consumer information, visit  http://www.homeservicecontract.org or call 913-871-5600.

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CONSIDER AGE OF APPLIANCES AND SYSTEMS WHEN PURCHASING A HOME

 

Cost of service and repair can be costly according to the National Home Service Contract Association. A home service contract is a good option.

(Lenexa, KS) — There are many items to consider when purchasing an existing home. Many buyers, especially those in the market for their first home, look at the sale price to determine if they can afford to buy. The National Home Service Contract Association, the industry trade organization serving home service contract providers and consumer interests, strong suggests that consumers factor in the cost of maintenance, repair and replacement of major appliances and homes systems when budgeting for a home.  Knowing the “life expectancy” of those systems is key.

Take for example an air conditioning system. Most AC systems have a life expectancy of 10-15 years. If you are considering the purchase of a home that is over 15 years old, with the original system, you could be living on borrowed time. Three years or three months? Who knows? It’s a guessing game, but the only thing that is often certain is that when it does go, it will be at the most inopportune time. Considering that the average cost to replace and install an average air conditioning system is $4,500 – $6,500, doing a little upfront research is a pretty good idea.

You can protect yourself from many of these budget busters by purchasing a home service contract form a member of the NHSCA.

The following is a list of averages for many of the appliances and electronic systems in your home based on the most recent research from The National Association of Home Builders:

  • gas ranges – 15 years
  • dryers and refrigerators – 13 years
  • washers – 10 years
  • compactors – 6 years
  • dishwashers – 9 years
  • microwave ovens – 9 years
  • HVAC – 15-20 years
  • furnaces – 15-20 years
  • tankless water heaters – 20 years
  • electric or gas water heater  – 10 years
  • heat pumps -16 years
  • air conditioning – 10 to 15years
  • garage doors – 10 to 15 years

Home service contracts provide service, repair or even replacement on a home’s major systems and appliances. At an average range of $350 – $550 for a year, these contracts typically cover items such as heating systems, interior plumbing, electrical systems, water heaters, dishwashers, and garbage disposals. Other items such as pools, spas and septic tanks may be added at an additional fee. As always, we suggest you consult with your real estate agent for guidance.

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry and consumer information, visit  http://www.homeservicecontract.org or call 913-871-5600.

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Tips on Winterizing Your Home

 

Take a few minutes to read and make sure you have properly winterized your home.

The NHSCA contributed to a terrific article on SheKnows.com 
Read the entire (original and unedited) SheKnows.com by Rolla Bahsous online here.

winterizing-your-home

How to get your home ready for the cold season
If you’ve already pulled out your winter coat and put snow tires on your car, there’s still one thing you’re missing before the cold weather hits. Most people completely overlook the few simple steps needed to winterize a house. It’s important to remember that while home service contracts generally provide service, repair or replacement for the major built-in appliances and systems in your home – such as dishwashers, electrical and plumbing systems, heating ventilation and air conditioning systems  – regular maintenance is still very important.

  1. Self-check your heater and HVAC

Turn the heat on and be sure that all the rooms in your home are getting enough heat through the vents. Check and change your HVAC (furnace) air  filters.  “Many of us think of changing our furnace filters just once or twice a year, yet experts say we should replace them every month during the heating season,” says Andrea Woroch, a consumer and money-saving expert.

  1. Schedule a professional furnace maintenance visit.

A furnace tune-up not only includes cleaning that keeps your furnace running efficiently, but it also catches small problems before they turn into big problems that can not only cause inconvenience and discomfort. An annual maintenance contract from a local, trusted HVAC company is also a great idea. They will not repair or replace broken units like a home service contract, but they go a long way to keeping your home running happy and healthy.

  1. Check batteries and update your fire and CO detectors.

Check and replace all batteries as needed. Don’t forget a good quality carbon monoxide detector in your bedroom and near your gas heater and/or gas water heater.  Even a small problem can lead to gas leaking into your home or dangerous carbon monoxide levels. Carbon monoxide (CO) is a deadly, colorless, odorless, poisonous gas. According to the Consumer Product Safety Commission, on average, about 170 people in the United States die every year from CO produced by non-automotive consumer products. Be mindful, many  detectors typically need to be replaced every five to seven years. 

  1. Get the fireplace ready

If you have a fireplace, be sure it’s ready by ensuring the chimney is clean. If you have burned a few cords of wood, having a professional chimney sweep is mandatory. If you don’t have a fireplace but wish to have the cozy ambience, check out some faux fireplace units at your local décor store. Some of these fireplaces are designed to emit heat in addition to the “fire” display.

  1. Check your gutters

Letting leaves pile up in the gutter can cause big problems any time of year, and in cold weather especially. The NHSCA says, “During winter months, leaves can potentially cause melting ice and snow to backup into your attic, and even your basement. Be sure to pay particular attention to gutters that have branches directly over them. Not all trees shed their leaves at the same time so you may need to check the gutters in both the fall and early winter.”

  1. Check your windows

To keep warmth inside your home, inspect all windows and make sure there aren’t any cracks where heat may escape. It might be wise to cover all your windows facing North with a plastic sheet. You can find these at your local hardware store and the cost far outweighs the heating saving you’ll gain by covering your windows. Pella Corporation, the leading manufacturer and designer of windows, doors, blinds and shades for homes and commercial buildings, also recommends clearing windowsills of dirt and debris since pre-winter window cleaning is one task most homeowners overlook: “Debris like sand, dirt or leaves can get caught in windowsills and moving parts of windows or doors. Clean these areas with a dry paintbrush to create a tighter seal and enhance window and door performance.”

  1. Check the outside of your house

If you haven’t eyeballed your home’s exterior in a few months or more, now’s the perfect time to reassess at the start of a new season. Before that first snowfall, Pella Corporation recommends repairing or replacing damaged exterior surfaces that could expose your home’s interior to the outside elements. Pella Corporation advises, “Cracked or deteriorated wood on the roof or near the foundation is typically associated with water penetration and may allow moisture or cold air to leak into your home. Look closely for signs of moisture leakage and replace damaged wood. Consult a professional to help correct any roof or drainage problems around your home.”

  1. Remove leaves around your outside HVAC unit.

The HVAC unit is likely your home’s largest operating system. The compressor part of your air conditioner is located on the exterior of your home and can become inefficient with debris and leaves blocking it. You can even use a wet dry vacuum or your hands to remove the debris from the bottom for manual cleaning. Wear gloves if using your hands for manual cleaning and turn off your main breaker first – just to be safe.

  1. Turn off exterior faucets

This may seem like a no-brainer, but it’s also one of the easiest home winterizing tips to overlook — because it’s so simple. According to the NHSCA, “Un-drained water in pipes can freeze, which will cause pipes to burst as the ice expands.” The NHSCA recommends, “Start by disconnecting all garden hoses and draining the water that remains in faucets. If you don’t have frost-proof faucets (homes more than 10 to 15 years old typically do not), turn off the shut-off valve inside your home.

  1. Install a programmable thermostat

To keep home temperatures regulated and energy costs to a minimum, we recommend installing a programmable thermostat to lower temperatures when the house is empty and warm it up again in the morning. We have used and love the internet controlled NEST brand which retails for about $199.00. However cheaper models are available that work fine. Woroch says, “You can pick one up for as little as $20 and save an average of 10 percent a year on your heating and cooling bill. Since some of these are expensive, look for deals to save money on programmable thermostats and other home energy products.”

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry and consumer information, visit  http://www.homeservicecontract.org or call 913871-5600.

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Popular Mechanics – How to Get the Most From Your Home Warranty

While written in April 2013, this advice from PM is pretty much timeless.

Suppose someone is considering buying a home…READ MORE

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry, media  and consumer information, visit  http://www.homeservicecontract.org or call 913-871-5600.

#13

 

HomeWarrantyWiz.com Interviews Jeff Powell, President of NHSCA

August 7, 2012

Back in April HomeWarrantyWiz.com published an interview with Counsel for the National Home Service Contract Association (NHSCA), Art Chartrand. In today’s piece we meet the President of that same association. On behalf of First American Home Buyers Protection Jeff Powell is the current President of the NHSCA and I recently talked with him about his duties, the association, and its work. Thanks to Jeff for his time and for sharing more information about the association with readers who visit this website.

What are your duties as President?

My company, as a member of the NHSCA, actually holds the position and I represent them as the appointed person to fulfill the responsibilities given to the sitting NHSCA President. My role is mainly to facilitate, escalate, and prioritize the relevant issues the industry is facing among the association members. All of the member companies are represented by leaders who are highly experienced and engaged professionals in our industry. So the role of the President may imply a greater authority than the other members, but someone must be the one to press everyone to make decisions on issues and move on to new business.

How long do you hold this position? When is the next President appointed and how?

It’s a two year term. The most recent appointment was made at our annual meeting in Chicago this spring. The next President will be decided by nomination and vote by the members, with the likely successor being the current Vice President.

As President do you have a particular role in deciding or vetting new member applications from home service contract companies?

A new member committee decides on applications. That committee seeks to recruit new member companies and also handles the vetting process with new member applications. This process involves all the member companies giving feedback on a company that applies for membership in the association This vetting helps to demonstrate to homeowners which companies are operating legitimately and have the reputation that would best represent the industry’s best practices.

The member companies of the NHSCA include some big company names, your own company included of course. Is there any threshold in terms of customers served, contractor networks, or other company-size-criteria that would limit membership in the NHSCA?

No, there are no specific criteria but the majority of the major players in this industry are already members of the association. Smaller companies benefit though by being members and are welcomed if they meet the standards set by the group members. The experience and resources that the collective companies bring to the association are a great help to the companies that become members. This type of investment of financial and human resources, in the end, benefits the entire industry and that is the goal of the NHSCA.

Some service contracts these days are very specific in terms of what items in or around a residential property are covered. Are there limitations on what sorts of companies can become members of the NHSCA where specific service contracts are concerned, public utility water or sewer line service contracts for example?

The association would consider on a case by case basis any company that applies for membership. The ultimate decision relies mostly on whether the contract the company provides fits the definition of a home service contract. If the answer is yes then the company would be considered for membership.

In a press release this summer there was mention of a numeric coding system for the NHSCA’s member companies. This system seems like a great resource for home owners trying to verify that a home service contract company isn’t a look alike or sound-alike-company-name. Where exactly do your member companies display their NHSCA member number?

The member companies will each decide their own way of displaying the membership information, member number, NHSCA logo, etc. The association is more focused on cooperation than dictating to members how to represent their membership but most members will likely make their NHSCA member information available in their online and offline consumer-facing literature.

There was an article published online back in May in which you commented on the situation with shortages of the old coolants commonly referred to as R-22. For readers who are not familiar with the challenges that HVAC technicians have today getting sufficient amounts of R-22 refrigerants, can you please shed some light on how the changes with the Environmental Protection Agency’s regulations affect home owners whose cooling systems use those older refrigerants? How does having a home service contract pay off if a home owner needs repairs to the cooling system that require recharging with R-22 refrigerants?

The price of R-22 has increased significantly which has led to increased costs to repair air conditioners. A home service contract helps protect homeowners from these additional costs.