Fire losses have been known to cause major damages to HVAC systems, both internally and externally. However, smoke and soot may not result in the same impacts. Before settling a claim with reported smoke and fire losses, it’s critical that adjusters verify that smoke or fire caused the HVAC system to malfunction and have an expert determine to what extent.
The HVAC system described in this claim assigned to HVACi was near an area that experienced a garage fire. The adjuster sought HVACi’s expert help to determine if the furnace and ductwork were affected and needed replacement.
Fill out the form to get your copy of the smoke and fire claim case study to see what the comprehensive assessment revealed and how we arrived at that conclusion.
Residential HVAC equipment is vulnerable to smoke and fire damage, but full replacement may not be necessary to return the HVAC system to pre-loss condition. Repairs may be sufficient for some components, and others may have sustained damage from a typically non-covered peril or may be non-damaged.
This guide details four common types of HVAC equipment damage reported in smoke and fire claims, as well as key signs of the damages.
The intricacies of HVAC systems and questions surrounding smoke and fire damage make these claims particularly complex. Fires as well as soot, smoke, and ash contribute to smoke and fire damage claims. Because of their location, exterior components such as condensing units and the equipment contained therein are vulnerable to smoke and fire damage.
When it comes to smoke and fire claims, HVACi experts have noticed a discrepancy between what the policyholder reported as cause of loss and the peril determined by comprehensive testing. Even confirmed smoke and fire damage may not require full replacement or costly repairs. Adjusters can make confident determinations by understanding how these perils pose a threat to exterior HVAC elements and common indicators of these damages.
The discrepancy between the reported cause of loss and the actual cause of loss in the CCG IQ 2021 Annual Report highlights the need for expert assessment in smoke and fire claims.
Fire Damage
An HVAC system that sustained fire losses often has visible evidence that can include charring, melted components, and burn marks. However, knowing a probable cause of loss doesn’t paint a whole picture. Determining the scope of damage for an affected HVAC system requires an HVAC expert, as does accessing units in a fire-affected area. The characteristics of each type of HVAC system determine its fire risk as well as its ability to be repaired or replaced after a loss.
Electrical components and wires housed in the condensing unit may be damaged by fire, but they may also be the cause of damage to other parts of an HVAC system. Catastrophic capacitor failure may cause an ignition that consumes the wires, leading to more damage throughout the unit.
The control board within an air handler overheated and ignited, damaging other electrical components and leaving the unit’s interior blackened with soot.
Soot and Ash
Some damage to HVAC units doesn’t originate on the property. In fact, it can come from miles away. Wildfires are on the rise, according to the National Interagency Fire Center. The environmental and human cost of these fires is devastating, and they also have financial implications for the property and casualty insurance industry.
Outdoor split system condensing units and package units are vulnerable to direct flames from a wildfire. However, smoke, soot, and ash from a wildfire can be carried for miles before being deposited on HVAC equipment. Condenser coils in good condition can often be returned to pre-loss condition with a simple cleaning.
Condenser coils affected by dry soot, ash, and other particles can often be cleaned using a special solvent to return to pre-loss condition, avoiding potentially costly repairs or replacements.
Smoke Damage
Smoke may not be the cause of loss to an HVAC system even if a fire has been confirmed near or on a property. An objective HVAC system expert will ask the right questions and verify details of the affected components to confirm or exclude fire as the actual cause of loss. An onsite inspection can determine whether there is smoke odor impact, whether buildup is soot or dirt from deferred maintenance or missing filter components, and whether the system was running at the time of the reported fire.
There are two main types of smoke that can be found on the condenser coils. Dry smoke is the most common to external units and is often the result of a wildfire or other exterior flames. Wet smoke results from burning rubber or plastics. Unlike dry smoke, soot, and ash, its greasy consistency makes it more difficult to clean.
Wet, sooty smoke has a greasy appearance and is harder to clean from delicate wires and components, seen in this unit, than dry smoke.
Dry smoke damage can often be cleaned from exterior components, using a method similar to that employed against soot and ash, to return them to their pre-loss condition. The age and condition of the unit and the severity of the damage assist in determining how best to address the damages.
Repair or Replacement?
Several factors influence whether an HVAC unit can be restored to its pre-loss condition. While smoke and fire is the cause of loss for many claims where these perils are cited, many damages don’t warrant full replacement. The rest were found to function as designed, or they could be repaired with Like Kind and Quality components.
Don’t assume the worst or hope for the best when it comes to smoke and fire to HVAC systems. Trust the HVACi team to receive accurate causes of loss and repair or replacement determinations for your claim. Submit a claim to HVACi for quick, comprehensive solutions.
Hurricanes leave varying degrees of damage in their wake, such as this house destroyed by Superstorm Sandy.
HVACi was a trusted damage assessment expert that adjusters relied on to evaluate HVAC and Refrigeration equipment following Hurricane Ida. The Category 4 storm surpassed Superstorm Sandy and the three most destructive 2017 hurricanes to become the second costliest U.S. hurricane, according to recent Insurance Information Institute data. Adjusters can use the cause of loss determinations from those claims assessments to better understand which HVAC components are most at risk for hurricane damage and why.
The CCG IQ 2021 Annual Report shows what insureds reported as cause of loss versus what HVACi experts determined during HVAC assessments from Hurricane Ida claims.
Wind Impacts to Exterior Components
Hurricanes are ranked by their wind speeds through the Saffir-Simpson Hurricane Wind Scale, so it’s likely not a surprise that wind was both the most often reported and actual cause of loss for HVAC systems affected by Hurricane Ida.
Windblown debris could clog the condenser coils or cause major damages, such as this crushed condensing unit.
Windblown dust and debris can clog the condenser coil, which is essential in the heating and cooling processes for most HVAC systems. Traditional condenser coils have aluminum fins surrounding copper pipes filled with refrigerant. Obstructed fins can restrict air flow, though lower efficiency occurs when they are almost entirely blocked. Safely cleaning off dust and debris could eliminate the need for replacements.
Tree limbs, patio umbrellas, and other objects blown into a condensing unit could require settlements for more major repairs. Policyholders may need new condenser coils, or in more severe scenarios, a new condensing unit. Rarely is a full HVAC system replacement necessary.
Wind directly impacts condensing units in split systems and package units, too. Equipment may be tipped or knocked from concrete or plastic pads, elevated brackets, or rooftop installations. A full replacement may be necessary for package units blown from a roof to the ground. A new condensing unit, lineset, and additional components could return split systems with major damage to pre-loss condition.
An objective HVAC system expert should determine the scope of damage and accurate solutions before carriers settle for unnecessary equipment.
Rain, Floods, And Storm Surges
Hurricanes, also called tropical cyclones, are made up of thunderstorms that form over the ocean and move inland. Water-related losses come from the torrential rains, flooding, and storm surges that are common when hurricanes strike coastal areas.
HVAC system location impacts which equipment is most at risk for water-related damages. Components on the ground or in the crawlspace and basement are susceptible to flooding and storm surge, though flood-prone areas often have building elevation requirements to reduce losses. HVAC equipment in the attic or upper levels isn’t immune. Roof damage could cause rainwater to affect indoor equipment.
HVAC system location impacts what types of water losses it could sustain.
Where water contacts the HVAC system also affects scope of damage. Condensing unit components most at risk for water damage include electrical equipment, the compressor, and the fan motor. The force of floodwaters could shift a condensing unit. Saltwater also corrodes or deteriorates condenser coils, though this may be a sign of wear and tear.
Inside, air handler or furnace components susceptible to water damage include the control board, wires, capacitors, gas valve, blower, and other equipment. Sheet metal ductwork, flex ductwork, ductboard, and insulation sustain varying degrees of water damage, which could result in repairs or replacements.
Once water reaches electrical components, more major repairs may be necessary; however, water contact with lower sections may have minimal impacts. An HVAC expert can assess the water damage to determine the scope of loss and what repairs would return equipment to pre-loss condition. An assessment would also define the source of the water, as flooding, surface water, and groundwater may not be covered by all insurance policies.
Lightning and High Voltage Surge Impact Electrical Components
Direct lightning damage is rare for HVAC systems. When it occurs, direct lightning causes visible impacts such as arcing, burning, and electrical malfunctions. In contrast, high voltage surge was the second most common cause of loss for HVAC equipment assessed after Hurricane Ida.
High voltage surge damage is common after hurricanes for several reasons, including nearby lightning, loss of power, or other voltage fluctuations.
High voltage surges are the result of nearby lightning strikes, power outages, and other voltage fluctuations that affect the power grid, transformers, wires, and electrical components. Surge losses are confined to the electrical system and use wiring as their path. Malfunctions could occur to multiple components and may not be visible.
Non-Covered Perils Appear in Hurricane Claims
Hurricane perils, including wind, water, and high voltage surge, can cause minor to major damages, though it’s critical to note that these often don’t result in the need for full system replacements. Only 42% of HVAC equipment that HVACi experts evaluated after Hurricane Ida needed full replacement.
Equally as important, many hurricane claims have causes of loss that aren’t typically covered. Wear and tear accounted for 21% of the damages assessed after Hurricane Ida, and 11% of equipment was non-damaged at the time of assessment.
HVAC system experts can ensure claim settlement accuracy by determining cause of loss and scope of damage. HVACi has a network of thousands of professionals who evaluate HVAC and Refrigeration equipment nationwide. Adjusters receive comprehensive reports with verified cause of loss, repair and replacement recommendations, and settlement recommendations based on market value pricing – without slowing down the claims process.
Need help with a hurricane-related claim that involves HVAC systems? Submit a claim to HVACi for quick, comprehensive solutions.
Hurricanes leave incredible damage in their wakes, and it’s not unusual for policyholders to misattribute damage from other perils to recent weather events. This insured discovered that their HVAC system was no longer cooling the home. Two HVAC companies suggested that it had been damaged in a recent hurricane. The adjuster handling this claim turned to an objective third party with expert knowledge to receive a quick and accurate assessment that revealed the correct cause of loss, enabling the adjuster to settle the claim appropriately.
Request this case study to find out what HVACi learned when assessing the HVAC system, and how we arrived at our recommended settlement.
The Rethink Smoke and Fire Damages to HVAC Systems Webinar has already occurred. You can watch the recording here.
Some losses included in claims with HVAC systems may look like smoke and fire damages but aren’t. Know what to expect and which fire-related failures are common before settling another claim.
In the webinar Rethink Smoke and Fire Damages to HVAC Systems, Technical Education Manager Jay Dykstra discusses this peril’s effects on specific HVAC components and how to distinguish these damages from other causes of loss.
During the presentation, he’ll cover:
Reported versus actual cause of loss for HVAC systems in claims
HVAC components and system types frequently included in claims, such as condensing units, furnaces and air handlers, package units, and ductwork systems
Evidence of smoke, fire, and heat damages to residential and commercial HVAC systems
Real-life claim scenarios that show impacts caused by smoke and fire or other perils
Important: Pre-recorded webinars do not qualify for CE credit.
Torrential downpours, leaky roofs, and malfunctioning appliances could all lead to HVAC system water damages. Before settling your next water-related claim, consider how these variables impact the scope of damage and possible repair opportunities for residential and commercial HVAC systems.
1) Know the Water Source.
The water type and source are factors in figuring out what’s needed to return HVAC systems to pre-loss condition after a water loss and knowing if it’s a covered peril. Verifying the cause of water exposure can give an early indication of the potential repair scope.
The type of water that contacts property could impact whether policyholder equipment can be repaired.
Black Water contains contaminated materials with chemicals, sewage, oil, or other dangerous debris and is caused by sewage backup, floodwater, or standing water exposed to sewage. Cleaning or minor repairs to impacted equipment may be more difficult because of hazardous contaminants. This is considered a Category 3 water loss. However, an expert should verify whether the HVAC equipment was exposed to black water, even if it was found nearby.
Gray Water, which can cause a Category 2 water loss, is wastewater from households or office buildings, including dishwashers, washing machines, sinks, showers, and bathtubs. It doesn’t have fecal contamination and is safer and easier to treat, though gray water can still cause HVAC system malfunctions that require repairs.
Clean Water, as the name suggests, is cleaner than other water types and comes from the tap, a broken water line, or rainwater. The scope of damage depends on which HVAC components were exposed. This is considered a Category 1 water loss.
The source of water may also determine whether the loss is a covered peril. Surface water, groundwater, and general flooding caused by an onslaught of precipitation or storm surge are not usually covered in a standard insurance policy. However, a policyholder may be eligible for a settlement for impacts caused by wind-driven rain. Cause of loss verification is imperative to reduce the risk of settling for a non-covered peril.
2) Check for Corrosion, Mold, or Other growth.
Normal system condensation and operation over time may cause corrosion and aren’t necessarily signs of water damage.
HVAC system water losses occur in a short time. However, signs of corrosion, mold, or other growth are evidence of prolonged exposure.
Corrosion may occur on the condenser coil, housed outside on the condensing unit. Long-term exposure to saltwater, sprinkler systems with untreated water, or the combination of dissimilar metals and water can accelerate corrosion. These are likely signs of wear and tear and are typically not covered. Verified water losses may be impacted by corrosion in that it limits some repairs that can be made. Corroded condenser coils usually can’t be combed and may require coil replacements to return to pre-loss condition.
Rust and corrosion occur elsewhere on an HVAC system. Sheet metal ductwork and other internal metal components may also be impacted by long-term water exposure – even from normal operation. An equipment assessment would determine whether corrosion or other signs of wear and tear contributed to the loss.
3) Determine How High the Water Reached on the HVAC Equipment.
The height of water exposure could determine whether critical HVAC components have been impacted.
An HVAC system’s condensing unit is most susceptible to weather-related water losses. Fewer repairs may be needed if water exposure is lower on the equipment because critical components are near the top. Water exposure to the compressor, electrical compartment, or fan motor may require more major repairs.
Inside a structure, HVAC equipment’s location and whether it sits horizontally or vertically impacts water losses. Crawlspaces, utility closets, and basements are more likely to sustain flooding events than attics. However, attics may be affected by roof damages and other internal leaks.
Critical components are more at risk for a water failure in a horizontal furnace or air handler. Water would need to reach higher levels to impact essential equipment in vertical units. Building codes may dictate the height of HVAC system installation for this reason. Ductwork and insulation are also prone to water losses that require repairs.
Look for water exposure lines to determine how high water reached. Lines of dirt and debris on the system’s back panel, electrical compartments, and adjacent building walls may be visible. Equipment labels with ink appearing to run may also indicate water exposure.
Whoever is evaluating the HVAC system for losses should consider all evidence to make more accurate determinations.
4) Verify Contractor Recommendations.
The force of water could cause HVAC equipment to become displaced and require moderate to major repairs to the system.
For example, condensing units may shift on their pads. If the connecting lineset has any breaks or kinks, contaminants may enter the refrigerant loop, causing extensive damage to the compressor or other components. Major repairs may include replacing the condensing unit, lineset, and other equipment to ensure compatibility between the internal and external equipment. Be aware that contractors may recommend full-system replacements once repairs reach this moderate level. However, this is rarely a necessity, and should be verified.
Have a claim for a water-impacted HVAC system? Policyholders likely don’t provide information about these variables that impact water losses when filing their claim. Let HVACi do an objective, comprehensive damage assessment for you to determine cause of loss, scope of damage, and the most applicable repairs and replacements – without slowing down the claims process. Submit the claim to the experts at HVACi.
Lightning losses can look extreme, like this condensing unit taken off its pad. Even then, full HVAC system replacements are unlikely.
Less than 1% of HVAC equipment that HVACi assessed last year had verified direct lightning damage as the cause of loss, according to the CCG IQ 2021 Annual Report. While other perils are more likely to have damaged policyholders’ HVAC systems, adjusters still need to take lightning into consideration in claims.
Direct lightning can impact multiple HVAC system components. The scope of damage varies between specific incidents, but lightning damage likely won’t require a claim settlement for a full replacement. Expert damage assessments are essential for more accurate claim resolutions if any of the following HVAC system components have reported lightning damage.
1. Failed Blower Motors
HVAC blower motors are fans with electric motors used to move air through the HVAC system. They are critical components because in cooling mode, blower motors move the air through the evaporator coil while refrigerant absorbs the heat from the air. In heating mode, blower motors create airflow so that heat is transferred to the air to warm a space.
It may be a surprise that direct lightning can affect this component because blower motors are attached to the furnace, which is part of the indoor equipment in a split system. These losses can occur when lightning strikes a chimney or roof and impacts the furnace cabinetry.
Don’t forget: Arc marks and other visible evidence are present to show where the lightning traveled on a property.
The arc mark shows where direct lightning affected HVAC equipment and resulted in damage to the blower motor.
2. Compromised Refrigerant
Refrigerant is essential to any split system. It evolves from gas and liquid states depending on its temperature and pressure and transfers heat to or away from a space. Lightning striking indoor or outdoor HVAC equipment can affect the refrigerant, which would cause the system to malfunction.
Lightning energized the refrigerant circuit and compromised the refrigerant, but the system could still be repaired.
Sometimes HVAC systems will be void of refrigerant after a reported lightning loss. In one claim that reflected a common scenario, the refrigerant circuit was energized with electricity as the result of a lightning strike. The electricity escaped and arced between the refrigerant piping and evaporator coil housing. In turn, the refrigerant circuit was compromised, though all other components measured within optimal range.
It’s critical to note this type of damage may result in a major repair, but even then, a full replacement is unlikely to be necessary. In this claim, the adjuster was advised that the policyholder needed a new condensing unit, evaporator coil, and copper lineset. An HVAC system expert would recommend replacement equipment that is compatible with and meets efficiency standards of the components already in place.
Refrigerant may also be affected by a failed lineset. HVAC evaluations have shown that lightning can blow a hole in the lineset, which connects indoor equipment to the outdoor condensing unit. This compromises the entire refrigerant circuit, requiring repairs.
Don’t forget: R-22 is a frequently used refrigerant type. Though virgin R-22 was banned in 2020, reclaimed R-22 can still be purchased and used in existing equipment.
3. Malfunctioning Control Boards and Other Electric Components
Lightning struck a property and caused a defrost control board, and other components, to malfunction.
Unlike high voltage surge that can only impact electric components, lightning can affect anything in its path. However, electric components are a probable target for lightning damages. Among the susceptible equipment is the defrost control board.
Though there may not be visual evidence, operational testing would prove whether the board has failed. This type of damage would likely result in a minor repair by replacing the defrost control board to return equipment to pre-loss condition.
Other common electronic components that are susceptible to lightning damage include the indoor control board, outdoor control board, and thermostat.
Don’t forget: Before settling for replacement equipment, whether an individual component or a full system, verify that the cost matches market values for the loss location.
4. Damaged Ductwork
As previously shown, lightning can travel through other non-electric items such as chimney flues and linesets. Ductwork is also susceptible to lightning damage and could be the only HVAC component affected.
Ductwork can also sustain direct lightning impacts.
In one assessment, the unit was operational as were all the internal electrical components; however, there were two failed runs of flexible ductwork. The lightning struck the loss location’s roof, and two flexible ductwork runs in the attic were damaged. All other components measured within an optimal range, and the system could be repaired.
Don’t forget: Comprehensive assessments evaluate all HVAC system equipment so that nothing is overlooked.
5. Impacted Furnace and Condensing Unit
Though lightning can affect small, individual components, it can also impact enough equipment to require a replacement furnace or condensing unit. Even then, a full HVAC system replacement is rare unless there are efficiency incompatibilities. It’s important to have equipment evaluated to know the best course of action.
Don’t forget: Objective experts will ensure only the most appropriate repairs or replacements are recommended to return equipment to pre-loss condition.
The HVACi team uses engineering best practices to thoroughly test all HVAC and Refrigeration equipment and provide recommendations for repairs and replacements. We’ll also recommend settlement costs that are in line with market values. Adjusters will receive a comprehensive report with verified cause of loss and scope of damage to reduce the risk of claims leakage.
Did your policyholder report lightning as the cause of loss for an HVAC system? Submit the claim to HVACi for accurate results.
Floods, foundation leaks, sump pump failures, and roof leaks can cause major damages to homes and businesses. Among the items impacted are HVAC systems. By the end of the Essentials of Settling Water-Related HVAC Claims Webinar you’ll know about water’s impact to split systems, ductwork, and package units, among other components.
Topics include:
The sources of water that result in HVAC system property claims
HVAC systems and components most commonly involved in water-related claims
Water-related damages and whether they could be repaired or replaced
Real-life water-related HVAC claim scenarios
Watch our Essentials of Settling Water-Related HVAC Claims Webinar recording by filling out the form provided.
Important: Pre-recorded webinars do not qualify for CE credit.
StrikeCheck’s What Makes Pool and Hot Tub Claims Different webinar has already occurred. You can watch a recording here.
As the weather heats up, customers are using their pools to cool down. Malfunctioning pool and hot tub components could lead to costly claims, particularly if you aren’t as familiar with the types policyholders may have or what repairs could return them to pre-loss condition.
You can learn more about these claims in StrikeCheck’s webinar, What Makes Pool and Hot Tub Claims Different? Technical Education Manager Jay Dykstra will cover:
Pool and hot tub equipment claims significance
Types of pools and hot tubs and their unique components
Reported vs. actual causes of loss
Real-life pool and hot tub claim scenarios
Important: Pre-recorded webinars do not qualify for CE credit.
