Don't let home appliance-repair contracts trip you up

Many HomeSmart and Home Service Plus appliance-repair plan customers like the peace of mind that the plans offered through Xcel Energy or CenterPoint Energy can provide. But a pattern of complaints on Google and Yelp show wait times of five to 20 days for some customers when a furnace or air conditioner goes on the fritz.

Other consumers complained about difficulties canceling HomeSmart and Service Plus plans even after a move and technicians who never show up after the customer takes a day off work.

Similar to an extended warranty, appliance-repair plans charge about $20 a month to cover four large appliances such as a furnace, central air conditioner, washer, hot water heater, dryer, refrigerator, dishwasher or range.

The Better Business Bureau of Minnesota and North Dakota lists a number of complaints, but consumers considering a service plan may want to check the hundreds of online reviews before committing. The two companies land between two and four on a five-star rating on Yelp and Google.

Twin Cities Consumers' Checkbook editor Kevin Brasler recommends skipping the service plans and socking away the $250 or more in annual payments in a savings account for repairs. For a free look at recommended repair shops in the Twin Cities for furnaces and central air, go to checkbook.org/startribune/HVAC. For appliances, go to checkbook.org/startribune/ApplianceRepair. Companies are rated on quality of service and fair pricing.

Xcel's HomeSmart basic program charges $2 less per month than CenterPoint's Service Plus. The major difference is that CenterPoint offers immediate coverage at sign-up. Xcel customers are covered after 30 days. Xcel customers who initiate a service call before 30 days can still request a technician but are charged regular rates for the trip.

Consumers frustrated with the contract may get better results posting a complaint online than asking to speak to a supervisor. HomeSmart and Service Plus supervisors monitor the comments and sometimes post a phone number to call them directly. Many people commenting mention wait times of 20 minutes or longer to speak to a representative.

Customers who want to cancel HomeSmart or Service Plus need to contact them directly, not Xcel or CenterPoint. Customers are notified once a year of a contract, but the wording in the notice only hints at it. "Your coverage automatically renews on [date]" and "We look forward to providing you with another year of excellent service," the Xcel HomeSmart notice says.

It is possible for customers to cancel their service due to a move if the account is claim-free in the past 12 months, but the customer will need to speak to a supervisor. "While the terms of service note that customers must pay for the remaining months of an annual agreement, we can generally work with customers to waive that amount if they haven't had a service call in the last 12 months," said Xcel Energy spokesman Randy Fordice.

Workaround: Ask when your plan renews, especially if you are considering canceling or moving.

2. Prepare for long waits. Waits of five days to two weeks for service are not uncommon if your furnace or air conditioning goes out during peak times. During the first heat wave or cold spell, many appliances don't function properly, and the supply of service technicians can't keep up. That could mean more than a week without heat or cooling. Catherine Yang of Minneapolis was told it would be 10 days before a technician could make it to her house in July during a stretch of 90-degree days. She called an independent technician instead who offered same-day service at a reasonable price.

Workaround: Call the company that sold or installed the appliance if it's fairly new, or get a reputable independent repair reference from friends or Checkbook.

Workaround: Ask for an ETA if available on the day of service or schedule an independent backup for a later day.

4. Pay attention to the contract. Make a list of what is and is not covered by the contract. Furnace heat exchangers, air-conditioning compressors, refrigerators in garages, water/ice dispensers on refrigerators and ceramic or glass cooktops are rarely covered.

5. Got an older appliance? Service plans won't repair it if parts aren't available. Some consumers have been denied service because the part was not available from the original manufacturer even if it is still available from other sources.

Workaround: Consider a maintenance agreement with a reputable dealer that services your model or ask HomeSmart or Service Plus if they will reimburse you for the part you ordered and have it installed by their technician.

6. Is your brand covered? Verify at sign-up that your appliance brand and model is covered. Some brand names or models may not be covered, such as Amana HTM or Lennox Complete Heat.