Does Homeowner Insurance Cover AC Units?

As unusual weather patterns like relentless heatwaves and bitter cold fronts become more common, the value of having a reliable HVAC unit becomes more apparent. But sometimes, it stops working when you need your HVAC unit the most. Where can you turn for help to pay for repair or replacement?

Your homeowner’s policy has helped you with various household repairs in the past. But does homeowner insurance cover AC units? The answer depends on multiple factors. Let’s look at the issue in more detail.

 

What the Standard Homeowner’s Policy Covers

Your homeowner’s policy defines the specific conditions under which you’re covered. For example, the typical homeowner’s insurance offers protection against fire. So, if a fire strikes your home, you could expect your insurer to pay for damage to your HVAC.

Your insurer’s HVAC system coverage generally also covers vandalism, theft, lightning strikes, and storm damage. For example, it’s not uncommon for an outdoor HVAC unit to need major servicing after a hit from a giant tree limb blown by strong winds.

Your homeowner’s policy also offers AC unit coverage but in a different manner. Generally, insurers treat HVAC systems as part of the house while seeing individual AC units as personal property.

 

Flood Insurance

The average homeowner’s insurance policy doesn’t cover floods. So, if your home is in a flood zone, you’ll need a flood policy to repair a flooded HVAC.

You can look for your area on federal flood maps. But even if you aren’t in a historically flood-prone region, you might find flood insurance a comfort due to changing weather patterns that could impact your HVAC.

 

Earthquake Insurance

The standard homeowner’s policy also doesn’t cover earthquakes. And it’s not mandatory to own an earthquake policy in California despite the risk.

Especially vulnerable are older homes near fault lines. So, if you do decide to purchase an insurance policy, review it carefully to ensure your HVAC is covered.

 

An Aging AC Unit

Your standard homeowner’s policy may be top-of-the-line, but don’t expect even the best homeowner’s policy to offer compensation when your HVAC stops working properly due to aging parts. All mechanical devices work less efficiently in time, so it would be financially disastrous for an insurance company to offer insurance against the effects of aging.

HVAC units also age prematurely due to a lack of regular maintenance. Knowing that you, not your insurance company, will have to pay the bill for replacing a neglected unit can prompt you to stick to a regular maintenance schedule. At the least, have an experienced technician examine your system before the start of the hottest and coldest seasons.

 

Equipment Breakdown Coverage

If you’re certain that you want extra protection for your HVAC unit, you can purchase equipment breakdown coverage. This insurance isn’t a separate policy but a rider to your regular homeowner’s policy.

A rider is simply an addition to your policy. It’s an extra or add-on.

You’ll have to check with your insurance representative to see if your carrier offers it. And you’ll also want to ask about the cost to see if it makes economic sense for you and your family. You may decide that the annual price for the coverage is reasonable, but you’ll have to take a long look at the deductible to conclude whether it’s worth it.

It’s also important to understand what the rider will and will not offer. Equipment breakdown coverage focuses on electrical and mechanical failures. Suppose electricians made a mistake installing your unit, sending too much electricity to it. Your rider would pay to replace the damaged HVAC.

However, even equipment breakdown insurance doesn’t cover repairs due to neglect or old age. It also won’t pay for mold damage or because a stray cat wandered into your crawl space and clawed through the ductwork.

 

Warranties

Warranties are another option for protecting your HVAC. Warranties differ from insurance in what they typically cover, so coupling them with your homeowner’s policy could offer you the coverage you desire.

Home Warranty

For example, a home warranty may be your answer if you’re worried about replacing aging parts. Home warranties will compensate you for service related to everyday wear and tear. That’s why you’ll hear home warranties referred to as home repair insurance.

But you’ll need to count the cost. It’s more expensive for a home warranty annually than for an equipment breakdown rider. Why?

The reason has to do once again with aging parts. Since aging is inevitable, warranties must factor that reality into their costs. If homeowners keep the warranty and the HVAC unit long enough, it’s nearly certain that they will eventually file a claim.

But remember that equipment breakdown insurance doesn’t cover aging parts. So, the annual cost for the coverage can be low since the likelihood of the homeowner filing a claim isn’t high.

Manufacturer Warranty

Usually, you’ll find the most cost-effective protection in the HVAC’s manufacturer warranty rather than in a home warranty. The initial warranty typically lasts no more than five years. However, manufacturers often make extended warranties available.

 

Filing an Insurance Claim

Suppose your HVAC receives damage from an event covered by your insurance. Then what?

You can choose to file a compensation claim. The insurance company will evaluate the damage and make an offer. The valuation differs according to the types of homeowner insurance policies the company offers.

If your insurance offers replacement value, you’ll receive funds equal to the current HVAC replacement cost. But if the policy specifies actual cash value, your insurer will pay the fair market value of the HVAC. In either case, the age and condition before the storm damage will influence the insurance company’s valuation.

 

So, Does Homeowner Insurance Cover AC Units?

The average person doesn’t consider protecting their HVAC until after disaster strikes. Then they wonder ‘does homeowner insurance cover AC units?’

You should always review your policy. Typically, you’ll find that the run-of-the-mill homeowner’s policy will compensate you when your unit’s damage results from fire, theft, vandalism, lightning, and wind.

But you’ll need special insurance for flood and earthquake damage. And no insurance protects against an aging AC unit. That’s where warranties come in.

The good news is that you can keep your AC unit running strong for years with regular maintenance by the Air Force Air Conditioning & Heating experts. Arrange a technician’s visit so your family can remain comfortable even on the worst weather days.