{sigh} I give up worrying about this stuff. What’s the point? Trying to get abreast of the money thing is like trying to exceed the speed of light: it violates a law of physics.
The AC guy was here for the seasonal maintenance visit. He says the recent hailstorm trashed the coils on the aged Goettl HVAC unit on the roof. Goettl went out of the manufacturing business several years ago, and so the parts are no longer available. Therefore, says he, the unit will have to be replaced.
Cost? About $7,890.
Because the storm is regarded as a “natural disaster,” insurers are covering the damage without raising people’s rates (although you can be sure everyone in the state will see their premiums go up next year as a result of this). All very nice…except that by way of saving some cash on the already phenomenal homeowner’s insurance premiums, I raised my deductible to $2,000.
This statement the guy gave me shows the $1,500 tax credit the government supposedly will pony up and suggests the power company may or may not rebate $250. Presumably The Hartford will deduct those amounts from whatever they’ll pay toward this thing. So…that hailstorm is going to cost me a minimum of two grand.
And you know it’s not gunna stop there.
The AC guy thinks there’s no roof damage, but The Hartford is sending a claims adjuster over to examine not only the HVAC unit but also the roofing. The deductible, I’m told, will only apply once if I have to also make a claim for the roof.
Meanwhile, no one has looked at the downtown house, which also was hailed mightily upon and also has a high deductible.
So much for any silly ideas I had about catching up financially, having a little breathing space, being able to pay the underwater mortgage’s premiums with my teaching salary. Damn!
I’ll have to dig into the very savings that were going to be used to stock my bank account with enough each month to pay the day-to-day bills. The money from my next three months’ salary will have to go to make that up. And that will not leave enough to cover the cost of next year’s mortgage payments out of the remainder of what I will earn by teaching in 2011.
LOL! Is there any question why my belly hurts and my blood pressure is high?
The law of physics?
You can’t win.
What can I say? I checked w/ Mr. FS and he says that price sounds about right. Alas.
Also–a new system should save you big bucks on your utility bills. So there’s some lemonade.
I doubt the co. can deduct the tax credit from your total. Sounds ridiculous.
@ frugalscholar: It’s a bit on the high side. Lennox is a higher-end unit, although friends who have two brand-new ones have had a lot of headaches with the things.
The guy noted on his estimate that the unit was eligible for a $1,500 rebate from the feds and $250 from the power company (actually, the power company is reimbursing $400 for 16-SEER units). What the insurance company will do, then, is cover the actual cost I’ll end up paying. So my $2,000 deductible will come out of that actual cost: say the adjuster figures $7,000 – $1500 – $250 = actual cost of the unit of $5250, that’s what he’ll probably figure the reimbursement on. So my $2,000 comes out $5,250, with the insurance company paying $3,000 and collecting the $1,750 in rebates.
One way or the other, even if I get the rebates, I end up paying $4,000 toward a $7,000 unit; I’m out of pocket $2,250.
Or so I imagine.
However, I don’t trust anyone, least of all some brand-new-to-me air conditioning company. So I called another guy. He’s going to drop over on Monday. He comes highly recommended as a) having been in business here for a couple of decades and b) scrupulously honest.
I notice the CoolDeck has a lot of new chips in it. When the Hartford guy comes by to inspect the roof, I’m going to ask him if he’ll agree to repair the decking, too.
Ouch. I hadn’t heard of A/C problems from that storm, but I guess it makes sense. I thought our $500 deductible to fix the broken mirrors and hail dents on my husband’s car was bad. So sorry to hear about that :(.
@ Lindy Mint: Both A/C and roof. If your house is in the area where the hailstorm hit the hardest, you should have both checked. Two craftsmen, one of them the much respected roofer, have said that you can’t tell whether the roof was damaged without getting onto the roof to inspect it. Be careful not to call some fly-by-night roofing outfit. If you’re in the Valley, I recommend Frank Hays of Hays Roofing. He’s been here for several decades and is as honest as they come.
Is your air conditioner working now?
(just curious)
Our AC unit is 12 years old and still working. Time will tell how long it will last.
One thing you can be sure of is when it rains, it pours.
@ Deedee and George: The unit was functioning the last time I used it. Now that the heat is over, it’s turned off. I’m told that it won’t survive much longer with the alleged damage to the coils; we’ll see, however, what a second AC guy and the insurance adjuster think about that.
The day of the AC unit that runs for 25 years is over. Every tradesman I’ve spoken with agrees that the newer units are engineered to die in about ten years. If that were not deliberate, planned obsolescence (which it is), the products are built or assembled overseas by cheap labor. They get banged around in shipping to the U.S., so that many units are already damaged by the time they’re installed. Coils often leak from the git-go, leading to expensive repairs early in the unit’s life. You can figure that one of the pricey high-efficiency units you buy today will have to be replaced in a decade or so.
Start saving your pennies now!
I’m not sure how the old the original unit it, but not only will a new one save you considerably in energy costs, but getting your insurance company to buy you a new one at a cost to you of $2,000 is hardly a catastrophe. A catastrophe would be if the thing just decided to die (an uninsurable event) one toasty August day and you had to pay to replace it, at 100% cost to you. There was a time when you might have gotten nothing for this loss because your old one, after depreciation, probably isn’t even worth $2,000. (Think about what you could have sold it for before the hail storm, that’s closer to the “actual cash value”, which is what insurers used to pay.) I know everyone likes to bash insurance companies (including me, most of the time), but the fact is, replacing old stuff with new stuff is about the best deal you will ever get. I know one of the unfortunate symptoms of bag lady syndrome is seeing things in the worst possible light, but I honestly don’t think it takes much imagination to see that this could have been a lot worse. Your health, mental and physical would probably improve if you at least tried to look at the brighter side. I know, I sound like an idiot, but I do find that trying to look at the brighter side really does make me feel better about my life.
@ Pat: We’re assuming The Hartford will not jack up my premiums in response to my filing a claim. My son, who works there, says they will — that’s it’s not so that all insurance companies are not penalizing customers for hail damage.
In that case, whatever I might save in AC bills will be lost in higher homeowner’s premiums.
In fact, the alleged savings have been somewhat exaggerated. One of my neighbors replaced one of these old heat pumps with a shiny new high-efficiency units, and she said they were sadly disappointed: their savings were negligible.
So I would be surprised if the savings would even make up for increased insurance premiums.
If I change this thing out, it won’t be because I think a newer unit will save money but because I have no other choice.
You’re entirely right that $2,000 is a bargain for a new unit that could cost almost $8,000. Ordinarily, I’d be thrilled at the opportunity to replace an aging AC unit that will have to go sometime in the highly foreseeable future. However, this is not the right time for me to be bled of $2,000. I can pay it, but to do so will cause some suffering, and the consequences next year will be difficult to deal with. I think I’ve had enough suffering over the past 8 or 10 months, and so I don’t welcome any more of it. 😉
We replaced our heater and a/c unit a couple of years ago for around $8500. The a/c unit had a seer of 14 and I wish I had went higher because it was only $100 or so more. We hardly ever use the heater but that a/c is going a lot especially at night so I can sleep.
Get a few estimates and check the warrenties,too.
@ Linda: Yipe! that’s quite a chunk of dough.
But the $100 difference isn’t what I’ve run into. On the Lennox, the buy bid $4,979 for a 13 SEER; $5203 for a 14 SEER (which is what you have to get to qualify for the tax credit), $6,539 for the 14 SEER, and $7,890 for the 16 SEER.
So the price would increase in increments of $224, $1,336, and $1,351. However, part of the fellow’s pitch is that you get these alleged rebates:
A $1,500 tax rebate for the 14-SEER would give you a final price of $3,703, less than the 13-SEER. He says Lennox will throw in a $250 rebate for the 14- and 16-SEER units, making the net prices on those $4,789 and $6,140, respectively; thus a 16-SEER unit could end up costing you less than a 14-SEER number.
Hm. Nice sales pitch, eh? And when you utter the words “eighty-five hundred dollars” (gasp!), it begins to look pretty darned good.
Has the 14-SEER unit made any difference in your summer AC bills?
Not good news for me to hear. Our AC and furnace is original with the house and 21 years old. But all still work – knock on wood. I guess we will wait until they die to replace after seeing the cost. But the idea of having to buy a furnace that dies in the middle of winter in MN does not thrill me. Also it doesn’t give one much time to comparison shop.