Extreme weather took its toll on property claims in 2021, and more than half of all policyholder-reported perils were recategorized following an independent assessment. The data behind these trends – and others – is available in the CCG IQ 2021 Annual Report.
Experts at HVACi and StrikeCheck, CCG IQ’s damage assessment companies, evaluated hundreds of thousands of items included in claims involving HVAC and Refrigeration systems and electrically powered items.
The CCG IQ team analyzed the results of assessments that adjusters assigned to HVACi and StrikeCheck to provide carriers significant insights about claims nationwide.
Fill out the form to receive your copy of the CCG IQ 2021 Annual Report with data about:
HVAC and Refrigeration Systems: indemnity leakage information, repair vs. replacement frequency, claim data, claim trends by month, and catastrophe data
Electronics and Specialty Items: repair and replacement costs by item type, frequency of claims by item, repair vs. replacement costs, and claim trends by subcategory
Lightning: weather trends by state, lightning report with most found lightning, and the average distance of lightning flashes
Additional Claims Support: the merger between CCG IQ and Donan Engineering offers new opportunities for partnership
Use this resource to make better data-driven decisions related to claims leakage, carrier-wide efficiency and accuracy, and claims resources availability.
The How to Handle Lightning and Surge Claims Without Guesswork webinar has already occurred. You can watch the recording here.
Lightning is one of the most frequently reported causes of loss listed on HVAC and electronics claims – policyholders reported it for almost 20% of HVAC systems and nearly 40% of electronics in claims that HVACi and StrikeCheck handled last year. Advancement in testing tools and verification reports have made it easier for adjusters to confirm or exclude these perils before settling a claim unnecessarily.
Topics include:
Lightning and surge claims significance
Lightning and surge fundamentals
Residential systems susceptible to lightning and surge impacts
How lightning and surges have appeared in claims
Important: Pre-recorded webinars do not qualify for CE credit.
Hail impacts HVAC and Refrigeration equipment in different ways – even during the same storm. Some systems or components may have irreparable damage, while most will have failures that require minor to moderate repairs to return to pre-loss condition. Adjusters shouldn’t speculate on the scope of damage for claims with reported hail impacts or they risk settling a claim with unnecessary replacements.
An adjuster sought HVACi’s assistance on a commercial claim with more than a dozen different HVAC and Refrigeration items that had been impacted by hail. The need for quick results and evaluation of multiple complex systems made the claim particularly important for HVACi’s experts to provide recommendations.
This claim demonstrates that not all HVAC and Refrigeration equipment will be affected the same way and each need a thorough and consistent evaluation.
Fill out the form to receive your copy of the Commercial Claim With Hail Case Study. You’ll learn more about HVACi’s processes to provide objective and fast claim solutions, which include cause of loss verification, repair and replacement advice, and settlement recommendations.
If you’ve attended an HVACi or StrikeCheck webinar over the last few years, you’ve probably heard our Technical Education Manager Jay Dykstra unpack complex topics such as efficiency regulations, less common HVAC system types, and the impacts of different causes of loss to frequently claimed equipment. Now you may get some of those technical questions answered outside of the webinar setting with “Q&A With Jay.”
Adjusters and insurance professionals can submit questions to be considered for Q&A With Jay by emailing webinar@hvaci.com or connecting with Jay Dykstra on LinkedIn. Questions can be about specific causes of loss or residential and commercial HVAC systems and Refrigeration equipment. Dykstra will choose some questions and respond to them in an understandable way through videos uploaded to the CCG IQ YouTube page and posted on our social media pages. Make sure to like or follow these sites so you don’t miss one.
Remember, questions for Dykstra shouldn’t be about specific claims. For those, submit a claim to HVACi.
Dykstra has handled the development, presentation, and curation of technical education content and live and virtual continuing education for HVACi and StrikeCheck for several years. Previously, he was the Senior Property Learning Facilitator for Travelers Insurance and has also served as an Outside Property Claim Representative for both personal and commercial lines and catastrophe claims.
To register for one of Dykstra’s upcoming continuing education opportunities, go to HVACi’s webinars page.
Hail is the most often reported peril for HVAC and Refrigeration claims that adjusters assign the HVACi team. Wind impacts are also frequently claimed. Find out why our expert team is least likely to recommend full replacements for these perils and which repair solutions are often more appropriate.
Fill out the form to receive the link to our interactive guide, which covers:
Spring Storm Claims Trends
Other Potential Causes of Loss
Repair and Replacement Solutions
Reported vs. Actual Cause of Loss
You can also use it to sign up for access to the spring storms webinar recording.
Storms are related to thousands of HVAC system claims filed each year. Adjusters should verify cause of loss and scope of damage before settling for replacement equipment or assuming all damages are linked to reported weather events.
Below are 5 claims that adjusters assigned to HVACi that demonstrate the importance of expert evaluations to guarantee accurate claim resolutions.
1. Not All Claimed Equipment Was Damaged
Adjusters should confirm equipment is not working properly before settling a claim.
Hail and wind are among the top claimed causes of loss in HVAC system claims. However, policyholders claim hundreds of systems each year that are working properly at the time of assessment. Settling for them would cause unnecessary claims leakage.
A policyholder filed a claim for two HVAC systems with a total claimed amount of $8,180. The adjuster who assigned HVACi the claim wanted confirmation that hail impacted the units. Testing revealed the first HVAC system had hail damages, though it was still in good condition and operational. There were minor indentations on the top cover panel, and the fan guard was slightly bent. Each component could be replaced to return equipment to pre-loss condition.
The vetted technician tested the second system and determined it was operating as designed without any visual or measured evidence of damages. The adjuster avoided paying an unnecessary settlement for non-damaged equipment.
Total Recommended Settlement: $1,017
2. Damages Weren’t As Severe As Claimed
Two split systems had confirmed hail impacts, but a few minor repairs would return them to pre-loss condition.
Sometimes weather incidents impact everything that is claimed. However, these damages most likely won’t require replacements or major repairs.
An adjuster filed a claim for two split systems with reported hail damage. Their combined replacement costs totaled more than $31,000. A vetted HVAC equipment expert evaluated both systems and confirmed the cause of loss as hail for each. Noted hail impacts occurred to the condenser coils and the wire fan guards.
Luckily, the condenser coils weren’t impacted enough to require replacement systems. An HVAC professional could return them to pre-loss condition by installing new fan guards and combing the condenser coil fins. Neither are as expensive as a condensing unit replacement.
Total Recommended Settlement: $608
3. Cause of Loss Wasn’t What Was Reported
Lack of maintenance or wear and tear, which aren’t typically covered losses, frequently cause HVAC equipment to malfunction.
Even if a storm has caused widespread damages to an area, all the claimed damages won’t be related to the incident.
A policyholder filed a claim for an HVAC system following a windstorm. A contractor advised it would cost $4,800 to return the equipment back to pre-loss condition.
HVACi’s comprehensive evaluation determined the primary cause of loss was wear and tear, which is not typically a covered peril. The contactor wire wasn’t connected to the contactor, and the overall system was in poor condition. However, the HVACi report stated that once the wire was reconnected, the system resumed operation, and all other components measured within an optimal range. Not only was the original cause of loss not typically covered, the damage could easily be resolved without any replacement equipment or labor.
The adjuster would have unnecessarily settled the claim without getting an expert to evaluate the equipment.
Confirmed lightning damage doesn’t mean a replacement is the best or only solution.
Wind and hail often don’t require replacements, but what about lightning? Sometimes, lightning or high voltage surge can impact equipment and cause severe enough damages for major repairs or, in some cases, full system replacements. However, like other storm-related perils, it’s critical equipment with claimed lightning damage is thoroughly evaluated.
A policyholder claimed that the roof had been struck by lightning and the HVAC system had not been functioning properly since. The contractor gave a verbal quote of $15,800 to return the residential split system to pre-loss condition. An HVACi team member assessed the furnace in the attic and confirmed the cause of loss as lightning. A visual arc mark was present on the furnace cabinetry where the flue pipe connects. The disconnect box also had evidence of arcing. The blower motor’s winding resistances were not in typical ranges.
The extent of the damages required the policyholder to replace the gas furnace. Though this is a more major repair, a full system replacement was not necessary as advised.
Total Recommended Settlement: $3,133
5. Necessary Replacements Weren’t as Expensive as Contractor’s Estimate
Sometimes damages are extensive enough to require full replacements; however, contractor estimates should be compared to market value pricing.
Storm damage can occasionally lead to a full HVAC system replacement. It could be because of non-compatible equipment, repair prices that are close to or more than replacement costs, or too many impacted components.
The policyholder’s contractor provided an estimate for $11,365 to cover a replacement HVAC system. The estimate stated there was significant storm damage that impacted its efficiency and operation. A new condensing unit would not be compatible with the current system’s air handler; thus, a full replacement was necessary.
HVACi’s assessment also confirmed the primary cause of loss was hail that caused significant damage. The HVACi report also stated that the age and efficiency of the existing air handler made it incompatible to a new condensing unit. However, the HVACi team always researches market value pricing based on manufacturer databases and the loss location. The recommended settlement was thousands of dollars less than the contractor’s estimate, which means the adjuster – and the policyholder – could potentially be paying more than necessary.
Total Recommended Settlement $8,452
These are just a few of the thousands of storm-related claims that the experts at HVACi handle each year. The team is experienced and knowledgeable about HVAC and Refrigeration systems and the insurance industry. We provide comprehensive equipment evaluations to determine cause of loss and scope of damage and deliver an accurate recommended settlement cost along with other necessary information in a thorough report sent to assigning adjusters. Don’t let storm claims be the cause of unnecessary claims leakage. Submit a claim to HVACi to guarantee more accurate resolutions.
Wind blows trees and other debris causing claimed property damage. Photo Credit: “Firefighters, Storm, Tree, Wind” by Kollinger / CC BY 4.0
Wind is a common peril associated with storms, but the number of HVAC system claims that need a full replacement shouldn’t be blown out of proportion.
Between 2015-19, the combined perils of wind and hail accounted for the largest percentage of homeowner claims – 34%, according to the most recent data from the Insurance Information Institute. In contrast, these losses had lower claims severity than fire and lightning, bodily injury and property damage, or water damage and freezing during that same time.
Expert Tip No. 1: Adjusters should understand how HVAC systems could be impacted before settling property claims with reported wind damage.
Wind Claims Trends
Adjusters assigned HVACi tens of thousands of claims in 2021, and policyholders reported wind as the cause of loss for nearly 10% of them. Of those with claimed wind damage, 17% of equipment was non-damaged at the time of assessment and 11% was damaged by wear and tear, which is not typically a covered peril – more than a quarter of the equipment did not require a settlement.
When wind was a verified cause of loss, HVACi’s expert analyses concluded that 58% of equipment could be repaired to return to pre-loss condition.
Expert Tip No. 2: Adjusters should always verify cause of loss to ensure the most accurate settlements and reduce the risk of claims leakage.
Wind-Related Impacts to HVAC Systems
Wind, from storms, tornadoes, or hurricanes, can affect HVAC systems in multiple ways resulting in varying degrees of damage.
Dust And Debris Impacting Coils
Split systems are the most common residential HVAC system, and their condensing unit, which releases and collects heat through refrigerant, is outside.
Condenser coils inside the condensing unit include the copper tubing holding refrigerant and the aluminum fins that protect it. Fins are susceptible to collecting dust and debris that the wind blows in. Coils may become clogged or flattened from debris, hail, or other foreign objects, which could impact system efficiency if airflow is blocked. However, efficiency won’t be largely affected until nearly 100% of coils are flattened.
Leaves and other debris were blown into this condenser coil. Cleaning the condensing unit and straightening any flattened fin would restore it to pre-loss condition.
HVAC system replacements are unlikely for this type of wind impact. Policyholders could clean or comb the condenser coils using appropriate materials to return them to pre-loss condition.
Sometimes the fins in the condenser coils tear or are unable to be combed. If this happens, the most appropriate action may be to replace the condenser coils, but this again is considered a minor repair to return equipment to pre-loss condition.
Condensing Unit Damages Requiring More Major Repairs
Wind is a force of nature, and it could cause impacts to HVAC systems that require more major repairs – but replacements are still the most unlikely claim solution.
Large tree branches, lawn equipment, or other heavy objects may blow into the condensing unit causing dents, damaging the refrigerant tubes, or crushing parts of the system. An HVAC expert should evaluate the scope of damage to see if individual panels can be replaced or if a new condensing unit is necessary to return equipment to pre-loss condition.
Tree limbs or other heavy objects could be blown onto the condensing unit causing minor to major damage.
A condensing unit may also be blown over or shifted off its pad, depending on the wind speed or force. The condenser coil and/or the fan assembly may be affected and require replacement. Additional components at risk of damage if the condensing unit moves are the lineset and the electrical whip, which transport refrigerant to the indoor equipment. Contaminants could enter the refrigerant tubes and cause significant damage.
Even if a new condensing unit and lineset are needed, it is unlikely that the indoor HVAC equipment, such as the furnace, will also have to be replaced. The type of refrigerant and the configuration of the equipment are the variables that would impact that. But if there is a refrigerant mismatch, such as a new condensing unit that uses R-410A and a furnace that uses R-22, additional components and actions can be taken to make the equipment compatible without a full system replacement.
Expert Tip No. 3: Get an objective HVAC system expert to determine how much of the equipment was impacted and recommend the best solution.
Expertise and Objectivity Are Keys to Accurate Settlements
The scope of wind damage to an HVAC system varies. Only someone with HVAC experience should determine the most appropriate course of action to return equipment to pre-loss condition. However, adjusters shouldn’t simply accept estimates provided by policyholders’ contractors.
Often, contractors are more likely to suggest replacing equipment that is unnecessary, compared to a more minor repair such as cleaning or replacing condenser coils. It’s critical that adjusters obtain an objective assessment for more accurate claim settlements.
Objective HVAC system experts should complete comprehensive evaluations to determine the most accurate claim solutions.
The experts at HVACi have decades of experience and first-hand knowledge about HVAC systems and the insurance industry. Our thousands of vetted technicians located nationwide aren’t allowed to discuss findings with policyholders or solicit work to guarantee their objectivity. The HVACi team then analyzes diagnostic data to deliver reports that include cause of loss verification, repair and replacement recommendations, and market value pricing for all available equipment.
Don’t throw caution to the wind when making settlement decisions for claims with HVAC systems. Submit a claim to HVACi to receive data-driven results quickly.
The Evaluating Spring Storm Damage to HVAC Equipment webinar has already occurred. You can watch the recording here.
The number of hail-related HVAC system claims increases substantially during the spring storms months, along with the number of claims for damages caused by wind and foreign object impacts. Don’t fall into the trap of unnecessary replacements for these claims.
Topics include:
Storm-related claims trends, including the percentage of claimed equipment that was non-damaged
A brief overview of HVAC system components most susceptible to weather impacts
Types of damages to expect and their potential repair solutions
Real-life storm claim examples and their evaluation results
Important: Pre-recorded webinars do not qualify for CE credit.
It may be challenging for adjusters to evaluate claimed HVAC system damages when policyholders list cause of loss as wind. It requires expert HVAC equipment knowledge, comprehensive testing, and an understanding of best practices for potential repairs.
The adjuster in this case study sought HVACi’s help to verify wind was the cause of loss for two residential split systems and to know how to best settle the claim for repairs or replacements. Our expert evaluation likely saved this carrier from an unnecessary settlement.
Fill out the form to read what our experts determined was the actual cause of loss and how we came to that conclusion.
HVAC systems that utilize a gas- or oil-fired furnace or boiler are equipped with flue pipes to vent harmful fuel combustion gases out of the property safely as they exit the heating equipment. Gas and oil water heaters are also connected to flue pipes. It’s critical for adjusters to understand how they work and when they can receive evaluation support for claims with these components.
Chimney liners provided added insulation to keep exhaust gases from condensing.
Flue pipes begin at the connection to the boiler or furnace where the combustion gases exit the inducer motor housing. Gas and oil water heaters have a flue pipe connected at the top. The exhaust inside a flue pipe must remain warm while traveling to the exterior of the property so that the gas does not condense into a corrosive liquid and fall back into the system.
Some systems are located close enough to the roof or the wall they penetrate that they do not require chimneys to prevent condensation of the flue gases from occurring. However, flue pipes are often connected to heating equipment installed in the lowest areas of a house or building, such as a basement or crawlspace, but the exhaust is vented out of the top of the property, which can be several stories high. Similarly, some flue pipes are long enough that even indoor temperatures are cool enough to condense the flue gases if not insulated by a chimney.
Flue caps ensure water doesn’t go back down into the chimney or flue pipe.
Chimneys are typically built with chimney liners inside of them for added insulation from cold ambient air temperatures and winds that could otherwise cool the flue pipe and allow the gases to condense. Chimney liners also assist with airflow and ventilation of the rising gases. Flue pipes end where they connect to the chimney liner, which are usually constructed of varying forms of metal or clay and run the entire length of the brick-and-mortar chimney. Chimney liners terminate with a cap on top to prevent water from entering. When settling claims with these items, adjusters should make sure to get thorough evaluations for an accurate cause of loss and scope of damage.
HVACi is an all-in-one HVAC system and Refrigeration claims solution and desktop pricing option for insurance carriers. While HVACi does not inspect the brick-and-mortar structures of chimneys, the expert team does assess HVAC system items connected to them, including the entire flue pipe, chimney liner, and the cap on top. A masonry specialist must be consulted for chimney assessments and price verifications. HVACi also inspects gas and oil water heaters when they are part of the adjuster’s claim assignment. HVACi’s national network of technicians includes some who specialize in chimney liners and some who are equipped with appropriate scope tools that can enter and travel the length of the chimney to inspect the chimney liner. The HVACi team matches each claim with a knowledgeable, vetted technician in the loss location to ensure accurate, comprehensive, and timely assessments.
Contact HVACi or submit a claim to learn more about this specialized service and how HVACi can help adjusters more accurately settle these claims.
Adjusters should confirm equipment is not working properly before settling a claim.
Two split systems had confirmed hail impacts, but a few minor repairs would return them to pre-loss condition.
Lack of maintenance or wear and tear, which aren’t typically covered losses, frequently cause HVAC equipment to malfunction.
Confirmed lightning damage doesn’t mean a replacement is the best or only solution.
Sometimes damages are extensive enough to require full replacements; however, contractor estimates should be compared to market value pricing.
Wind blows trees and other debris causing claimed property damage. Photo Credit: “Firefighters, Storm, Tree, Wind” by Kollinger / CC BY 4.0
Leaves and other debris were blown into this condenser coil. Cleaning the condensing unit and straightening any flattened fin would restore it to pre-loss condition.
Tree limbs or other heavy objects could be blown onto the condensing unit causing minor to major damage.
Objective HVAC system experts should complete comprehensive evaluations to determine the most accurate claim solutions.
Chimney liners provided added insulation to keep exhaust gases from condensing.
Flue caps ensure water doesn’t go back down into the chimney or flue pipe.