Does Home Insurance Cover an AC Unit?

When Does Homeowners Insurance Cover an AC Unit?

Homeowners insurance can protect your air conditioning unit if it's damaged by a covered peril, such as fire, lightning, theft or vandalism.

For instance, if a house fire destroys your AC unit, your home insurance will likely cover the cost to repair or replace it. Or, if someone steals your AC unit, your insurance can help pay for a new one.

Your home insurance coverage depends on the details of your individual policy, so you'll need to read it carefully—or contact your insurer with questions—before starting the claims process. The policy likely won't cover the damage if it was related to wear and tear, lack of maintenance, mechanical failure or another exclusion.

The type of AC unit you have may also affect coverage:

• Central air conditioning systems are typically covered under the dwelling portion of your policy, which covers damage from all causes except those specifically excluded.
• Portable or window AC units may fall under the personal property portion of your home insurance policy, which usually only protects against specific perils.

How to File a Claim for AC Unit Replacement

If your AC unit is broken or destroyed, follow these steps to file a home insurance claim:

Assess the Damage

Contact a licensed contractor—usually an HVAC technician—who can evaluate your AC unit, estimate the cost of repairs and potentially determine the cause of the damage. All of this information can help you figure out if filing a home insurance claim is worthwhile.

As a general rule of thumb, filing a homeowners insurance claim can be a good idea if the repair costs are significantly more than your deductible, and you haven't filed a claim within the past seven years. Filing multiple claims within a short period can increase your premiums or lead to nonrenewal.

Document the Damage

Get a copy of the HVAC technician's report, which potentially indicates the cause and gives the insurer a concrete figure to evaluate.

Also take photos and videos of the damaged AC unit, and find documents that support the AC unit's value. These may include a receipt, credit card statement or a fair value estimate from the technician.

Contact Your Insurer

Contact your insurance company once you decide to file a claim. A representative can explain the claims process, which you may be able to complete online, over the phone or in person. You'll typically submit a claims form and copies of the documentation you've gathered.

Work With the Adjuster

The insurance company should assign your case to a claims adjuster. This person reviews your file and may ask follow-up questions or request more documents. Follow up quickly to move the claims process along.

Get Paid

If the claims adjuster approves your claim, the insurance company typically sends you a check for the actual cash value of your AC unit. If you have replacement cost coverage, you'll use the first payout to replace the items and give your insurance company copies of the receipts. Then you can receive a second payout for the difference between the item's actual cash value and the amount you paid for the replacement.

Learn more: How to File a Home Insurance Claim

What to Do if Your AC Unit Isn't Covered

You have options if your home insurance doesn't cover your AC unit or you decide against filing a claim.

Equipment Breakdown Coverage

Equipment breakdown coverage is an endorsement you may be able to add to your home insurance policy. This type of coverage pays to repair or replace your home's systems and appliances, including your HVAC equipment. It covers incidents beyond your control, but it won't cover normal wear and tear, damage from neglect or poor maintenance.

Home Warranty

A home warranty plan is a service contract that helps pay to repair or replace home systems and appliances that break down due to normal wear and tear. You can buy a home warranty at any time, but there's typically a 30-day waiting period between the purchase and the date you can start using the plan.

In-House Payment Plan

Some HVAC technicians offer in-house payment options to help spread the costs of the repairs into manageable monthly payments instead of paying in one lump sum. The company may have several options, such as low-cost financing plans or deferred-interest promotional offers. These plans vary with each company and may include a credit check.

Personal Financing

In some cases, you may need to cover the costs yourself. This might be necessary if in-house payment plans are unaffordable or you lack a home warranty plan or equipment breakdown coverage.

Some of your options include using a personal loan, a 0% introductory APR credit card or savings from your rainy day fund. Consider the costs involved in each option, such as the interest rate and fees, and whether dipping into your savings will cause financial strain later on.

Learn more: How to Pay for Home Improvements

The Bottom Line

Home insurance policies cover a broken or destroyed air conditioning unit if the damage was caused by a covered peril, such as fire, lightning, theft or vandalism. You'll need to review your policy or call your insurer to check whether you have coverage. Filing a home insurance claim for the AC unit could be a good idea if the costs significantly exceed your deductible and you haven't filed claims recently.