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Question DetailsAsked on 10/5/2016

Does $2600 out of pocket for 2 hot water heater code upgrades seem reasonable?

Home warranty is covering the tanks.

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2 Answers


You did not say what went wrong with the tanks or how old they are - but replacing two at the same time sounds like an unusual coincidence - a code violation would not normally hurt water heaters unless a gas leak burned them up, and a home warranty plan would not normally cover code violations anyway.

$2600 is in the range for a total replacement of two 30-40 gallon water heaters - sounds WAYYY too high for a code upgrade. I would get a second opinion on the need for the upgrades in the first place - and on the cost, because code upgrades for things like newer to-code flex gasline to the heater, seismic tieback straps, expansion tank, pressure regulator and such commonly run (assuming you don't need all these at one time) in the hundred to couple of hundred each to $300-500 total range per heater - not $1300 per installation.

My suspicion - without hard proof obviously because I am not there - is you are experiencing a very common event. Home warranty repair companies are normally under contract to the warranty company and get paid much less than normal repair costs for the warranty work, but they get into the deal as a loss leader to bring in clients who, while they are on the job, make for "captive customers" who normally do not think to get a second opinion on "additional" or "uncovered" charges. In many cases (or most, in my opinion) repuatable, self-sufficient companies do not contract out for this work - in many cases it is companies or one-man outfits that cnanot generate a living off their own reputation so they use customers from the warranty companies to fill out their workload.

And the system is gamed so many things are claimed (rightly or wrongly) to "not be covered by the warranty", generating very significant additional income to the contractors, who commonly kick back a percentage (probably illegally) of the upsold or additional work proceeds to the warranty company.

So any - to make money on the job, the repair contractors/vendors upsell customers on additional things or say that certain related and ancillary items needing done as part of the work are not covered by the warranty and therefore have to be paid for directly by the hoemowner - commonly to the tune of far more than the repair itself would have cost if they were paying for it without the warranty. Code upgrades is one of these items they like to claim because most homeowners are not at all knowedgeable in building code requirements or about the fact that generally you are NOT required to upgrade existing construction ot the now-current codes unless you are doing a near-total replacement of the house or system - in many cases what they are talking about are not even needed or do not exist, or they upgrade to current code on older systems even though the building code does not require it on repairs/replacements.

Some code upgrades are needed when replacing a water heater - replacing the older metallic flex gas line to the appliance for example, and replacing certain outdated types of gas shutoff valves - and in some areas pressure regulators and expansion tanks are required by code on heater replacements, whereas others count on the overpressure/ overtemp valve that comes with the tank to protect against over-pressurization.

I would get a second opinion - it may be far cheaper to just pay to have necessary work done yourself - though the warranty contractor may say he cannot replace the tanks until the code upgrades (which may or may not be legit) are done, so you may be in a catch-22 situation - but the $ amount sounds to me (assuming these are normal residential water heaters) like it is in the range where I would be real suspicious. In fact, it may be possible that the warranty company is not actually paying anything on the tanks and the contractor is just selling you replacements which may or may not be needed.

Ran into one case like that not long ago where a contractor for a home warranty company fixed a gas leak (minor) on a hydronic heating system boiler - then proceeded to falsely claim code upgrade requirements demanded a tankless boiler replacement which he sold for about $13,000 - about $8-10,000 over market value. Was a done deal by the time I got involved on an exhaust gas recirculation issue because he put the exhaust right next to the fresh air intake - have not heard if the homeowner pursued or succeeded in a consumer fraud claim against the warranty company and provider, but with home warranty companies let the buyer beware - a LOT (or most) of them seem pretty shifty to me.

Answered 3 years ago by LCD



Thanks for the quick response. That's great info. The 2 tanks are 50 gallon each. The original problem was water leaking out of one of the tanks but both pans had water in them. Also, hot water pressure had decreased quite a bit. Thanks again for your help.

Answered 3 years ago by hgraves2016

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