A broken air conditioner can be expensive to fix. Unfortunately, homeowners insurance only pays to repair or replace ACs damaged by covered perils such as fire or hail. This rules out most mechanical failures. Here’s a look at how home insurance covers an AC unit, and other options that may be available to you.

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When does home insurance cover an AC unit?

Homeowners insurance typically only covers AC units, including integrated HVAC systems, when they sustain physical damage from one of the normal perils your policy covers.

If a fallen tree or hail damages an air conditioning unit that sits outside your house or is mounted in your window, home insurance usually covers the cost of repairing or replacing it.

Your policy may also cover a power surge or lightning strike that damages your AC, although exclusions apply to some of the electrical components inside the unit.

The most common home insurance perils that apply to AC units include:

  • Fire
  • Lightning
  • Falling objects
  • Wind
  • Hail
  • Power surges
  • Theft
  • Vandalism

If you have a built-in AC system, including an HVAC or heat pump, your policy’s dwelling coverage applies to your air conditioner. Damage to wall-mounted and portable ACs usually falls under your policy’s personal property coverage.

The dwelling coverage in homeowners insurance generally provides more protection than personal property coverage. For example,

  • Dwelling coverage typically insures a built-in AC at its replacement cost value, which is the price of a comparable new one.
  • Personal property coverage only covers window-mounted and portable ACs at their depreciated value, unless you upgrade to replacement cost for your possessions.

In either scenario, you have to pay your policy’s deductible before insurance funds kick in.

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When does home insurance not cover an AC unit?

Homeowners insurance typically does not cover AC units that give out due to normal wear and tear. Nor does it usually cover a lack of maintenance, a mechanical breakdown or defect.

A few home insurers offer an optional mechanical breakdown endorsement that adds a little more protection to your policy for an AC unit and other appliances. These endorsements often cover your appliances and home systems for mechanical and electrical breakdowns, but not wear and tear.

Also, home insurance does not cover AC units damaged by excluded perils, such as floods and earthquakes. However, the protections in flood insurance and earthquake insurance, which are sold separately, typically do extend to physical damage these perils may cause to an AC unit.

What if my air conditioner springs a leak?

Although ACs do not run on water, improper drainage of the condensation inside a unit can cause water to seep out.

Unfortunately, homeowners insurance usually doesn’t cover water damage from a leaky air conditioner.

However, a few companies, including American Family, offer a hidden-water endorsement, which covers water damage to floors and walls around a leaky appliance, including an AC.

Although this endorsement can prove invaluable, it does not cover the cost of repairing or replacing the defective appliance itself.

How do I file a home insurance claim for my AC unit?

The first step in filing a homeowners insurance claim for an AC unit is to document the damage.

Smartphones make it easy to take photos of damage to your home and belongings. Make sure your photos also include any manufacturer’s data that may be stamped or mounted on your AC unit. Gather any relevant maintenance records and service records you may have, too.

If the damage is limited to your air conditioner only, get an estimate to find out how much it may cost to repair or replace the unit before you open an insurance claim.

If the total value of the loss is less than your policy’s deductible, you won’t receive any money from the insurance company. If your costs are only slightly more than your deductible, footing the bill yourself without opening a claim allows you to avoid the future rate increase that most companies charge after you file a claim.

How do home warranties cover AC units?

Most people don’t discover that homeowners insurance only covers ACs for covered perils until after their unit breaks down.

If you’re concerned that your AC or other appliances may break down in the future, a home warranty, or homeowners repair insurance, may be a good option for you.

Home warranties are service contracts, which are different from insurance. Although terms vary by provider, home warranties generally cover AC units and other home appliances that break down due to factors such as wear and tear or age.

Most home warranties come with a 30-day waiting period, and damage that occurs before then is not covered.

If you decide to buy a home warranty, make sure your plan covers the types of appliances you have. Most providers cover HVACs and other built-in systems, but window units are typically not covered.

You should also check on the amount of coverage provided by each plan you consider. Some home warranties only insure ACs for up to $3,000. Others offer up to $5,000 or more in coverage. Under most plans, the actual amount you receive won’t be more than your AC’s current value, after depreciation.

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