California Home Service Contract Association Reports: Value of Home Service Contracts Increases in Wake of EPA Proposal to Reduce Allowances of Freon(R)

VAN NUYS, Calif., May 17, 2012 (BUSINESS WIRE) -- As a steady increase in the price of a common air conditioning refrigerant prompts a spike in maintenance costs for homeowners across California and the nation, the California Home Service Contract Association (CHSCA) reports home service contracts are increasing in value.

On Jan. 1, 2010, the Environmental Protection Agency (EPA) placed a ban on the manufacture of new air conditioners using R-22, a refrigerant more commonly known as Freon(R), because of its ozone depleting effects. The use of R-22 was not banned, but allowances were dictated on its future manufacture and in order to service existing home air conditioners.

Then on Jan. 4 of this year, the EPA proposed a rule that, if adopted, would significantly reduce production and distribution of Freon(R) by as much as 50 percent. This has significantly increased, and in many cases, more than doubled the price of Freon(R) in recent weeks, according to the CHSCA.

"The majority of the time our industry repairs an existing air conditioning system, R-22 is involved in that repair," Jeff Powell, chairman of the CHSCA, said. "That means the cost of repairing air conditioners has gone up significantly. However, because home service contracts cover service and repair to existing systems, and providers have generally not increased the price of those contracts, the value to consumers has increased."

Home service contracts generally provide service, repair or replacement for items such as dishwashers, ovens, disposers, electrical and plumbing systems -- and most importantly, heating, ventilation and air conditioning systems. Many home service contract providers also offer a menu of optional items such as pool and spa equipment, well pumps, and free standing appliances such as refrigerators and clothing washers and dryers for an additional fee. Contracts do not cover pre-existing conditions, but provide service, repair or replacement for failures arising due to normal wear and tear during the contract period.

To learn more about home service contracts and providers in California, please visit http://www.homeservicecontract.org/california.htm .

About CHSCA
Members of the new CHSCA, which provide approximately 95 percent of all home service contracts in California, include 2-10 Home Buyers Warranty, American Home Shield Corporation, BPG Home Warranty, Fidelity National Home Warranty Company, First American Home Buyers Protection, HMS National/Cross Country Home Services, Inc., Home Security of America, Inc., Home Warranty of America, Inc. and Old Republic Home Protection Co., Inc.

About the National Home Service Contract Association
The 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. To learn more about the NHSCA and to find answers to the most common questions regarding the purchase of home service contracts, visit www.homeservicecontract.org .
SOURCE: California Home Service Contract Association

        
        For California Home Service Contract Association 
        Jeff Powell, 818-374-7477 
        Art Ansoorian, 805-653-1648