The severity and amount of activity during hurricane season continues to break records with increases in the number of named storms and hurricanes making landfall. Having both indoor and outdoor equipment, HVAC systems are often in harm’s way and are prone to damages that will wind up in claims. Know what to expect and the best methods for handling these claims with HVACi’s eBook, “Catastrophe Claim Preparation: Tips for Hurricane-Related Claims with HVAC Systems.”
Adjusters like you can better understand how hurricane-related perils, including wind, water, and lightning or surges, impact HVAC systems and some approaches to return them to pre-loss condition. You can also review actual HVAC claim damage assessment results from some major U.S. hurricanes, including hurricanes Harvey, Irma, and Matthew.
Fill out the form to also discover the prevalence of hurricane-related HVAC system claims that have equipment that is non-damaged or damaged by a non-covered peril to prevent that from happening to your carrier.
Not sure whether contractors’ recommendations for full replacements are necessary when settling your policyholders’ claims? Neither was the adjuster handling this residential claim about an HVAC system that was near a leaking water heater and sustained damage. The carrier sought the HVACi team’s help to quickly and accurately assess the HVAC equipment to determine cause of loss and scope of damage and to objectively recommend the best steps to return the policyholder’s system to pre-loss condition.
Fill out the form to get your copy of the water damage claim case study to see how our experts’ analysis compared to the contractor’s more than $18,000 replacement estimate.
Settling a claim with HVAC equipment shouldn’t feel like you need to read a manufacturer’s manual or have another lesson in thermodynamics. Understanding 6 key terms related to these complex systems can help adjusters settle claims related to them more confidently and accurately.
1. HVAC
Technical jargon for any industry can turn into alphabet soup. Though most frequently referred to as HVAC, it stands for Heating, Ventilation, and Air Conditioning. This describes what the equipment does to deliver preferred temperatures and air quality to a space.
It’s often not clear that air conditioning is the process of cooling air through the transfer of heat and humidity from warmer air to something colder. To make air feel cooler and more comfortable, water is removed from the air.
2. Split System (vs. Package Unit)
The difference between a split system, shown here, and a package unit is whether the HVAC components are separate or all together.
Traditional HVAC equipment has multiple important system types – most notably, the condensing unit and air handler or furnace. Condensing units remove heat from air, while furnaces and air handlers have heat sources to warm the air. This critical equipment is connected by copper linesets. After the air reaches its preferred temperature, it’s circulated through ductwork.
In a split system, which is the most common type of residential HVAC system, the condensing unit is outside while the air handler or furnace is inside. Package units, more frequently used in commercial applications, have the main components housed in one box kept outside.
3. Refrigerant – R-410A or R-22
Refrigerant regulations have been changing, including the phaseout of virgin R-22.
Refrigerant, which absorbs heat when the system is in cooling mode, is constantly moving and changing from gas to a liquid and back through closed loops.
R-22 was the most widely used refrigerant until the Montreal Protocol on Substances that Deplete the Ozone Layer international agreement impacted the use of R-22 and other ozone-depleting substances. As of Jan. 1, 2020, virgin R-22 can no longer be manufactured or imported into the United States, though reclaimed R-22 can be used to maintain and repair existing HVAC systems.
The main refrigerant used by manufacturers is R-410A. This refrigerant also has some effects linked with global warming, but an alternative has not yet been chosen.
R-22 and R-410A are not interchangeable. If the condensing unit used R-22, the policyholder would need to change the condensing unit and evaporator coil and flush the lineset to make it compatible with a furnace. A full replacement would be required if the split system had a heat pump.
4. Condenser Coils
Traditional condenser coils have thin aluminum fins surrounding copper or aluminum tubing.
Condenser coils are wrapped around the outside of a condensing unit in a split system and one or two package unit sides. After absorbing heat from the indoor unit, refrigerant being pumped by the compressor travels through the condenser coil tubes as a hot, high-pressure vapor. Heat is transferred to the surrounding air through the coils, and the refrigerant becomes a warm, high-pressure liquid to restart the heat absorption cycle.
In traditional coils, copper or aluminum tubes carry refrigerant and are surrounded by thin aluminum fins that can easily be bent, dented, or flattened. Package units may use microchannel coils, which have rigid aluminum ribbons in between horizontal channels that carry the refrigerant and are more difficult to damage.
5. SeasonalEnergy Efficiency Ratio (SEER)
The U.S. Department of Energy has set minimum Seasonal Energy Efficiency Ratio standards based on location.
In 2015, the U.S. Department of Energy analyzed HVAC system efficiency and set minimum standards based on climates throughout the country. The Seasonal Energy Efficiency Ratio (SEER) is the total cooling output during the cooling season over the total electric energy input during the cooling season. More efficient systems have a higher SEER rating.
Policyholders may have to replace the condensing unit and evaporator coil if the outdoor equipment isn’t compatible with indoor components, particularly if parts of an outdated system no longer meet minimum federal requirements. Other components can be added to make the systems compatible and ensure system efficiency.
6. Heat Pump vs. Furnace
Furnaces are forced-air systems that are a residential property’s primary heating source. Air is warmed by a heat source, including burning natural gas, propane, or oil, and then that warm air is sent through the ductwork and supply registers.
Heat pumps are condensing units that can operate in heating and cooling modes through a reversing valve. Unlike a furnace, heat pumps don’t generate heat but transfer it like in the cooling process. Heat is absorbed from the ambient air and returned to warm up the air in a space. Heat pumps are used in conjunction with air handlers, which have electric heat strips to supplement additional heat when necessary.
The HVACi team is full of experts who are ready to help carriers settle claims with HVAC and Refrigeration equipment. Use just the facts to determine cause of loss, scope of damage, and best repairs and replacement processes to return your policyholders’ equipment to pre-loss condition. To obtain your comprehensive, data-driven assessment report, submit a claim.
Nearly a quarter of the HVAC systems that HVACi assessed last year had lightning or surge as the reported cause of loss because this equipment is particularly susceptible to these perils. The Investigating Lightning and Surge HVAC Claims Webinar provides adjuster information about how to handle these claims more accurately and better tell the difference between damages caused by direct lightning, surge, and wear and tear.
Through this webinar, adjusters will:
Understand the essentials of lightning and high voltage surge damage in property claims
Identify specific HVAC components that are susceptible to these perils
Compare differences between HVAC system damages caused by direct lightning, high voltage surge, and wear and tear
Examine real-life scenarios that demonstrate what to look for when handling these claims
Watch our Investigating Lightning and Surge HVAC Claims Webinar recording by filling out the form provided.
Important: Pre-recorded webinars do not qualify for CE credit.
The severity and amount of activity during hurricane season continues to break records with increases in the number of named storms and hurricanes making landfall. Having both indoor and outdoor equipment, HVAC systems are often in harm’s way and are prone to damages that will wind up in claims. Know what to expect and the best methods for handling these claims with HVACi’s eBook, “Catastrophe Claim Preparation: Tips for Hurricane-Related Claims with HVAC Systems.”
Adjusters like you can better understand how hurricane-related perils, including wind, water, and lightning or surges, impact HVAC systems and some approaches to return them to pre-loss condition. You can also review actual HVAC claim damage assessment results from some major U.S. hurricanes, including hurricanes Harvey, Irma, and Matthew.
Fill out the form to also discover the prevalence of hurricane-related HVAC system claims that have equipment that is non-damaged or damaged by a non-covered peril to prevent that from happening to your carrier.
Rains, flooding, and leaks can all cause water to get into places it shouldn’t be – including your policyholders’ HVAC systems. But when might an HVAC system require minor or major repairs or replacements because of water?
Fill out the form to receive the Understanding Water Damage in HVAC System Claims Guide. It outlines HVAC components susceptible to water damage, water-related concerns, and HVAC system malfunctions that can cause water damage. This one-page guide also has a labeled diagram of a split system depicting the water danger zones. Keep a copy of this guide on hand for your next water damage HVAC claim.
More than 10% of the HVAC systems that HVACi assessed last year sustained damage from direct lightning or high voltage surge – and they were the top causes of loss policyholders claimed. Find out which components are most susceptible to each of these perils with this one-page guide.
Fill out the form to receive your copy, which includes:
Labeled diagrams of components in package units and split system equipment that could be damaged by lightning and surge
Observations by our experts of how lightning and surge damage may be evident
Trends for how often these perils have appeared in claims
Hail causes billions of dollars in property damages to commercial and residential policyholders each year. Any outdoor equipment could be at risk, and that includes your insured’s HVAC systems. But before you automatically assume hail damages will require settlement for a full replacement, fill out the form to receive your copy of the HVACi hail eBook.
This comprehensive overview includes:
The significance of hail in insurance claims
Components likely to be affected by hail, depending on the system type
Tips to confirm hail is the cause of loss
Repair options that are more likely than requiring a full replacement
Images and diagrams to make this information easy to read and understand
Hail-related claims can come in at any time of the year. Keep this resource on hand to refer to for your next one.
Can you name 5 different types of HVAC systems? Split systems and package units probably come to mind, but what about some of the less common ones? It’s important adjusters have a basic grasp of the uses of less traditional complex systems in order to better settle claims with them.
HVACi’s webinar, Handling Complex Residential and Commercial HVAC Claims, provides the foundation of what to know about these HVAC systems and equipment, including evaporative coolers, geothermal systems, economizers, exhaust fans, make-up air units, refrigeration equipment, and chillers. Better understand how they work, ways they get damaged, and why they may be the preferred choice for some of your commercial and residential policyholders.
The webinar includes:
The significance of complex residential and commercial HVAC claims
Identification of less familiar types of HVAC systems, including chillers, evaporative coolers, geothermal systems, and more
Common damages for each system type
Real-life claim scenarios of less common systems and their outcomes
Watch our Handling Complex Residential and Commercial HVAC Claims Webinar recording by filling out the form provided.
Important: Pre-recorded webinars do not qualify for CE credit.
The following article on “When water & HVAC systems mix, it’s not always a total loss,” written by Jay Dykstra of HVACi and StrikeCheck, was originally published on Property Casualty 360.
Settling water loss claims isn’t cut and dry. Water isn’t an automatically covered loss, such as damage that originates from flooding vs. a pipe leak. What’s more, policyholders and their contractors may feel the extent of the damage, particularly for HVAC systems, warrants major repairs or replacements, even when it doesn’t. This could result in a leak of a different sort. Companies can reduce the risk of claims leakage from water-damaged HVAC system claims by understanding how equipment can be impacted.
HVAC components that could be compromised
In 2020, 83% of the water-damaged HVAC equipment our company evaluated could be repaired. Among the factors that play into that determination is which components are most at risk.
The height that water accumulates impacts damage risks to a condensing unit.
Residential policyholders are more likely to have split systems that have components indoors and outdoors, and commercial policyholders have a higher number of package units that are entirely outside. While external HVAC system components always have a higher risk for water damage, particularly during severe weather such as the upcoming hurricane season, equipment located on the ground is even more susceptible.
Water in the lower parts of the condensing unit typically isn’t cause for concern. It becomes an issue when it goes higher on the equipment and reaches the compressor terminals. Areas prone to flooding may require policyholders to raise their equipment one or two feet above base flood elevation using a platform of concrete or masonry block to prevent this from occurring.
Once water reaches the system’s electrical components, repairs are more challenging, particularly if saltwater has made contact. Even in this scenario, full replacements are unlikely. Last year, the average repair cost for a water-damaged split system was $3,541, while the average repair cost for a package unit was $2,203.
If the condensing unit is moved off its pad, the biggest risk is that the copper lineset will break or kink. This increases the chances for contaminants to enter the refrigerant loop, which could cause major damage. If a replacement was warranted, the average cost for a split system last year was $9,295.
Outdoor components aren’t the only HVAC equipment susceptible to water damage. Indoor furnaces or air handlers in split systems can be compromised, particularly if water causes a short in the electric circuits and damages wiring, motors and the electronics.
Horizontal furnaces may have significant damages sooner because the burners are closer to the ground.
The amount of damage indoor equipment sustains depends on type and location. A horizontal furnace in a crawlspace will have significant damage sooner because of its proximity to the floor. A vertical furnace is more protected because the burner compartment is higher up, though water could reach the blower wheel and motor, which could require repairs. Equipment housed in the attic is least likely to have water damage unless the roof leaks onto it.
When considering claims with damage to indoor equipment, adjusters should make sure an HVAC expert looks for a water line, checks the control board for damage and evaluates the ductwork. There could be premature rusting or corrosion in sheet metal ductwork, flex ductwork could sag or ductboard may swell. Insulation inside the blower compartment could also become water-damaged.
Other water-related concerns
HVAC systems are designed to withstand some impacts. It’s unlikely large amounts of rain will harm the condensing unit or package system directly. According to the CCG IQ Annual Report, water was the actual cause of loss for only 4% of the HVAC systems that carriers assigned to HVACi. Water is often not the direct cause of loss but could be related to other perils causing damage.
Erosion: Flood water from storm surges or water falling too quickly at one time can cause erosion and wash out what’s underneath the condensing unit. Erosion and flooding could take the equipment off the pad, wash the unit away or cause it to not be level. Depending on how far off the original location it is, there could be major damage to the condensing unit or it could cause the connecting lineset to break.
Water may not be a direct cause of damage. Instead, water could push debris and other items into an HVAC system and damage it.
Debris: Water may not be the cause of loss if it pushes debris and other foreign objects into the HVAC equipment. This could cause minor to major damage. For example, debris could become lodged in the condenser coil fins. In many cases, the fins can be carefully washed out to remove the debris, but if the fins are flattened too far or are torn, the coil may need to be replaced. Even then, full system replacements are unlikely. However, if water pushes larger or heavier items into the HVAC system, more major repairs may be necessary.
Corrosion: The condenser coil consists of copper tubing covered in aluminum fins that are exposed to the elements that lead to corrosion, particularly saltwater or untreated water that has a low pH value. This can deteriorate the coils and weaken their integrity; however, this would be a sign of long-term damage. Corrosion could also impact indoor ductwork that would require policyholder action.
Mold: Wet ductwork could cause mold or mildew, which could impair air quality and become a health hazard.
Because water isn’t frequently a direct cause of loss and isn’t always a covered peril, it’s critical insurance professionals verify the cause of loss and scope of damage before settling the claim. Often individual components can be replaced to return the HVAC system to pre-loss condition without a full replacement. Don’t add claim leakage to the consequences of water-related damages.
The difference between a split system, shown here, and a package unit is whether the HVAC components are separate or all together.
Refrigerant regulations have been changing, including the phaseout of virgin R-22.
Traditional condenser coils have thin aluminum fins surrounding copper or aluminum tubing.
The U.S. Department of Energy has set minimum Seasonal Energy Efficiency Ratio standards based on location.
If the condensing unit is moved off its pad, the biggest risk is that the copper lineset will break or kink. This increases the chances for contaminants to enter the refrigerant loop, which could cause major damage. If a replacement was warranted, the average cost for a split system last year was $9,295.
