You know you have homeowners insurance and you likely understand that it’s necessary—but do you know why, and are you aware of what it does and does not cover as it relates to your HVAC system? If you’re like the vast majority of homeowners, the answer to those questions is probably negative.

It’s completely understandable to feel a little unclear on your insurance coverage, considering that “policy” can seem like a tidy word for pages and pages of fine print written in indecipherable legalese. Instead of trying to wade through the details on your own, rely on this straightforward guide instead. Here, you’ll find answers to four of the most commonly asked questions about homeowners insurance and HVAC coverage.

Do All Homeowners Insurance Policies Cover the Same Things?

No. Every policy is different, depending on who your insurance provider is and what level of coverage you signed up for. The only way to know exactly what your policy does and does not cover in terms of HVAC systems is to read through the terms or contact your insurance provider.

That being said, homeowners insurance policies do share a lot of the same terms, conditions, and coverage details. So much so, in fact, that we can make some general statements about what your policy probably covers. The information outlined here applies to most, so please keep in mind that it may not reflect your specific policy.

Is My AC Unit Covered?

You are covered for certain types of damage. For the most part, your homeowners insurance policy treats your AC unit just like the other crucial components in your home. That means it’s covered against events like storm damage but not covered against things like wear and tear.

If your AC unit is damaged by any of these factors, you can probably be reimbursed by your insurer:

-Fire that originates inside or outside the home. 
-Lightning that strikes the unit and destroys the electrical components.
-Falling trees or branches that land on the unit.
-Vandalism caused by someone who does not live in the home. Be aware that you may need to file a police report before filing a claim with your insurer.

This list is far from complete, but it gives you a sense of what kind of damage is covered. Often, homeowners insurance policies cover AC units under what is known as “Open Peril”, meaning that any type of damage is covered unless it’s specifically not covered.

These types of damage are commonly excluded:

-Normal wear and tear that happens due to years of normal use. For instance, if your AC unit breaks down after a decade, that’s usually not covered.
-Problems that happen because of a failure to perform routine maintenance. An example would be if you neglected to clean leaves and dirt out of the unit and then it malfunctioned.
-Floods and most other types of water damage. There may be exceptions but in general, you can’t file a claim if your unit is destroyed by water.
-Seismic events like an earthquake or a sinkhole that opens up in the backyard.

The last thing to consider is that most homeowners insurance policies treat window AC units differently than central AC units. With window units, fewer types of damage are covered because window units are considered “personal property” rather than a component of the home.

Is My Furnace Covered?

Furnace coverage is very similar to AC units — only some types of damage are covered. Generally, if the damage is due to accidental causes like fire, high winds, or frozen pipes, you will receive some compensation from your insurer. If the damage is due to age, maintenance issues, or a flood, the damage is probably not covered.

The key difference is that while a broken AC unit is frustrating, a broken furnace is actually dangerous. It could leak carbon monoxide gas into your home or even start a fire, so you need to contact a qualified furnace technician as soon as you notice any kind of issue. Call in an expert ASAP, regardless of whether or not it will be reimbursed by your insurer. Beyond being cold and uncomfortable, everyone inside your home is at physical risk until determined otherwise.

When Should I File an Insurance Claim?

The answer to this is subjective and depends on the details of your coverage. Unless you have a premium policy, you likely have to pay a deductible before being reimbursed for damage to your HVAC systems. So, for example, you may have to pay $1,000 out of your own pocket and then your insurance would cover some or all of the remaining cost of repairs.

After filing a claim, your homeowners insurance rates may go up — which is why some people opt not to file a claim, even if the HVAC damage is covered.

To identify the best course of action, start by contacting an HVAC company you trust. A technician will come to your home, inspect the damage, identify the solution, and give you a quote for the cost of repairs. If the cost is less than your deductible, you save money by not filing a claim. And if the cost is just a little more than your deductible, you may save more over the long run by not raising your monthly rates with a claim.

Another consideration to keep in mind is whether your policy covers “replacement costs” or “actual cash value.” Imagine that your AC unit is completely destroyed after a limb falls on it. If you are covered for replacement costs, you will be reimbursed for the original cost of the AC unit plus inflation. If you have actual cash value coverage, however, you will only be reimbursed for the depreciated value of the unit. Knowing how you will be reimbursed can help you to decide whether filing a claim is in your best financial interest.

Uncode Your Coverage Now

We recommend exploring your coverage and gaining an understanding of how it works now, before you need to actually use it. When your HVAC system is out of order, the last thing you will want to do is sit down and pore over your policy. Feeling comfortable with your coverage will make it that much easier to move to the next step in the process and partner with a HVAC contractor to determine solutions and which route you want to take.