Does homeowner insurance cover HVAC? That’s a question we often get from our customers, and the answer is yes in most situations. After all, your furnace and central air are an integral and essential part of your home.
However, whether standard homeowner’s insurance will cover the cost of damage to your HVAC unit due to electrical problems is another matter. It’s a gray area that depends on how the damage was caused and other factors.
We’ll take a look at when your insurance company will likely approve a claim for repairing or replacing the unit after electrical damage, and the situations where they likely will not. We’ll also go over the basics of homeowner’s insurance and filing a claim for HVAC damage.
Understanding Home Insurance Basics: Types and Exclusions
Home insurance policies typically include several types of coverage, including:
- Dwelling coverage: Protects the structural elements of your house.
- Personal property coverage: Covers your belongings and items inside your home.
- Liability coverage. Protects you if someone gets injured on your property.
- Additional living expenses: Pays the costs of temporary relocation due to damage to your dwelling.
However, standard homeowner’s policies also come with exclusions. Common exclusions include damage caused by:
- Normal wear and tear
- Lack of regular maintenance and upkeep
- Gradual damage like slow leaks and rust that could have been prevented or repaired
- Certain natural disasters (e.g., floods, earthquakes)
When You’re Likely Covered For HVAC Damage Caused by Electrical Problems
Your home insurance will probably pay for HVAC repair or replacement due to electrical problems in the following circumstances:
Lightning Strikes
If lightning directly hits your HVAC system or causes a power surge that damages it, most policies will cover the repair or replacement. More on power surges later.
Fire Damage
An electrical fire that damages your HVAC system will typically be covered under standard policies.
Falling Objects
If a falling tree or other object somehow causes electrical damage to your outdoor AC unit, it will usually be covered.
Vandalism
Intentional damage to your HVAC’s electrical components will be included in most policies.
Sudden and Accidental Damage
If a sudden electrical malfunction occurs that’s not due to wear and tear, neglect, or DIY repairs gone wrong, some policies may approve a claim.
When You’re Likely NOT Covered: HVAC Damage Caused by Electrical Problems
Knowing when does homeowner insurance cover HVAC is important, but knowing when it won’t is possibly more so. There are several situations where your insurance company will probably deny your claim for HVAC repair or replacement due to electrical issues:
- Wear and Tear
If your HVAC system fails due to old age or normal use, it’s not covered. - Lack of Maintenance
If the electrical problem is due to neglect or poor maintenance, your claim will likely be denied. - Manufacturer Defects
These are typically covered by warranties, not home insurance. - Gradual Damage
Slow deterioration of electrical components over time, which would fall under normal wear and tear, won’t be covered. - Power Company Issues
If a brownout or blackout of the electrical grid damages your system, it may not be covered unless you have specific endorsements or riders.
Who Pays for Power Surge Damage?
Power surge damage to an HVAC unit can be a gray area in home insurance. Generally:
- If the power surge is caused by a covered hazard such as a lightning strike, your insurance may cover the damage.
- If the surge originates from the power company’s equipment, you’ll probably have to contact them to file a claim for damages.
- For internal surges caused by your own equipment, you’ll likely be responsible unless you have purchased specific additional coverage.
How to File an Insurance Claim for HVAC Damage
If you believe your HVAC damage is probably covered, take these steps to file a claim. Your HVAC contractor will usually help you navigate the process.
- Document the damage by taking photos and videos of your system.
- Take reasonable steps to prevent additional damage, but don’t start repairs before the insurance company inspects.
- Contact your insurance company to report the claim as soon as possible.
- An insurance adjuster will inspect the damage and estimate repair costs.
- Obtain repair or replacement quotes from licensed HVAC contractors.
- Carefully consider the insurance company’s offer before accepting.
- Remember, if you disagree with the settlement, you can appeal the decision, preferably with the help of an attorney.
If your claim is approved, your insurance company may reimburse you in one of two ways:
- Replacement value: Covers the cost to replace your unit at the time of loss.
- Actual cash value: Reimburses the market value of the unit at the time of loss.
By gaining a thorough understanding of your coverage, you’ll be better prepared to handle unexpected HVAC issues. Remember, if you’re in doubt about your coverage, call your insurance company for clarification.
Does your damaged HVAC need repairs or replacement? Contact the experts at Apex Air and we’ll help you navigate the claims process.