Warranties important when hiring contractors

February 21st 2013
Warranties important when hiring contractors

When homeowners decide to undertake major home improvement projects there are many different factors that can affect their decision. People often evaluate a company’s quotation based on price, reputation, product to be used, however one of the most important items to understand prior to making a decision on which contractor to choose is warranty. Unfortunately, this can also be the item that is least understood by consumers.


There are two components to a warranty – material and labour. The material warranty applies to the products used for the project. Material warranties can be confusing particularly for items such as furnaces. Since a furnace consists of many different mechanical and electronic parts, some of the furnace parts have different warranty periods than others, IE a furnace heat exchanger will more than likely have a longer warranty period than the furnace control board. Some items will not be covered under the warranty for a product. If a material such as fiberglass roofing shingles fade because of exposure to the elements, it will not typically be covered within the product warranty. Make sure you know what is and what is not covered under the material portion of the warranty. Material warranties are provided and backed by the product manufacturer, so be aware, in many cases you will have to deal directly with the manufacturer to resolve product warranty issues.


The labour component of a warranty will cover workmanship issues. Many renovation contractors offer an industry standard 2 year labour. The workmanship warranty standard does vary between industries. Some companies will offer a 1 year workmanship warranty on items such as appliance repairs, exterior painting, and so on. This means the installer or contractor should take care of any costs associated with installation issues within the specific time-frame.


Warranties are important because it is a ‘guarantee’ which specifies the period of time the contractors’ workmanship or products used in the project are supposed to perform as required. Sometimes a lifetime warranty is simply that – a warranty that guarantees the project for life covering all materials and labour. Many companies advertise a ‘Lifetime Guarantee.’ You must keep in mind that lifetime guarantee doesn’t always mean that a product is guaranteed to perform the same in the first year as it will in the twentieth. Often lifetime warranties are pro-rated, which means that each year into the warranty period, the warranty coverage is reduced. This is similar to the wear warranty in the automotive tire industry.


For example in the roofing industry, a lifetime warranty has a term of 50 years. In year ten, the warranty coverage for the product is 20% less than in first year, meaning that you would receive 80% of the value of the product if you had a warranty claim in the tenth year. Warranty coverage is pro-rated over the 50 year term, which means that each year into the warranty period, the coverage amount decreases by 2%. These details are usually explained in the small print on the contract, so be sure to read your contract thoroughly and if you have any concerns regarding the warranty, address them with your contractor before you sign a contract.


If a company you have dealt with happens to go out of business, more often than not you will be out of luck with respect to the labour or workmanship component of the warranty; however the warranties provided by the product manufactures should still be in place.


At the end of the day a warranty is only as good as the company who stands behind it, so make sure you choose a reputable contractor and supplier that have a proven track record in the industry. Do your due diligence and obtain the proper contractor referral.