Does Homeowners Insurance Cover AC Units?
Navigate homeowners insurance coverage for your AC unit. Get clear insights on standard protection, common gaps, and ways to enhance your policy.
Homeowners insurance protects property from various perils. It covers the physical structure and personal belongings against unexpected events. Many homeowners wonder if their AC unit, a significant appliance, is covered by their standard policy. Understanding this coverage is essential for financial planning.
How Standard Homeowners Policies Cover AC Units
Standard homeowners policies typically include AC units as part of the dwelling structure. Central AC systems are considered fixtures of the home, covered under Coverage A. If the unit sustains damage from a covered peril, the policy may provide financial assistance for repairs or replacement.
Common covered perils include fire, lightning strikes, or windstorm damage. Vandalism, falling objects, or vehicle collisions with the unit can also lead to covered claims. Coverage applies when damage is direct and results from an unforeseen incident, not gradual deterioration or mechanical failure.
Common Reasons AC Units Are Not Covered
Homeowners insurance protects against specific perils, but many common AC unit issues are excluded. Damage from normal wear and tear, gradual deterioration, or lack of routine maintenance is not covered. These issues are considered preventable and the homeowner’s responsibility.
Mechanical breakdowns, electrical surges not caused by a covered peril, or issues from rust and mold are generally not covered. Damage caused by animals is also a common exclusion. Floods or earthquakes require distinct policies, as standard homeowners insurance does not cover these events.
Understanding Your Policy Details
Homeowners must understand how policy details affect AC unit claims. Policies offer either Actual Cash Value (ACV) or Replacement Cost Value (RCV) coverage. ACV coverage depreciates the unit’s value based on age and condition, paying out only that depreciated amount, which often leaves a gap for replacement costs.
RCV coverage pays to repair or replace the damaged unit with a new one, without depreciation. While RCV offers more comprehensive protection, it typically has higher premium costs. Homeowners are also responsible for their deductible, which can range from hundreds to thousands of dollars. For minor repairs, the cost might not exceed the deductible, making a claim impractical.
Exploring Additional Coverage
Homeowners seeking broader AC unit protection have additional coverage options. Equipment Breakdown Coverage (EBC) is an endorsement added to policies, designed for mechanical or electrical breakdowns. This coverage extends to issues like motor burnout or electrical shorts, typically excluded from basic policies.
A home warranty is another option, functioning as a service contract, not an insurance policy. Home warranties often cover repair or replacement of major home systems and appliances, including AC units, due to normal wear and tear or mechanical failure. These contracts usually involve service fees per visit and may restrict homeowners to specific repair contractors.