HVAC System Energy Efficiency Standards Guide

The U.S. Department of Energy updated HVAC system efficiency standards, effective Jan. 1, 2023. They dictate a rating all HVAC equipment must meet based on specified testing and location. Adjusters should understand what these changes mean and how they can impact future claims.

Fill out the form to receive your one-page HVAC System Energy Efficiency Standards guide.

You’ll learn more about:

  • What the required efficiency minimums are
  • How the ratings are determined
  • How ratings vary in different parts of the country
  • Key terms to know
  • Compliance rules
  • How more efficient replacements affect current equipment

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Adjuster Course in HVAC Refrigerant

The ban on the production and importation of virgin R-22, frequently used in HVAC systems, took effect in 2020 following a years-long phase out of these refrigerants. The same thing is happening for the next most popular refrigerant for HVAC systems, R-410A.

Through the Adjuster Course in HVAC Refrigerant interactive guide, you’ll see more information about:

  • Why refrigerant is so important to HVAC systems
  • A timeline of refrigerant changes and the phase downs
  • What could be next for HVAC refrigerants
  • What these rules mean for claims

Fill out the form to get the link to your interactive guide to learn all about it.

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Residential HVAC System Fundamentals eBook

Policyholders in warmer parts of the United States may have a heat pump instead of a boiler or furnace. If air is less humid, they may opt to cool a space with an evaporative cooler. Regardless of what type of HVAC system it is, it’s likely that at some point a residential insured’s equipment isn’t going to function properly and will wind up in a claim on your to-do list.

Keep the Residential HVAC System Fundamentals eBook handy to refer to when handling these claims. You’ll have brief overviews and labeled diagrams of the most frequently used residential HVAC systems in one easy-to-read document.

System types include:

  • Split Systems
  • Package Units
  • Mini-Split Systems
  • Geothermal Systems
  • Heat Pumps
  • Boilers
  • Evaporative Coolers

You’ll also have a glossary of the key components and heating and cooling processes for split systems, which are the most widely used by residential policyholders.

Fill out the form to receive your copy of the Residential HVAC System Fundamentals eBook.

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Top Reported Perils vs. Actual Cause of Loss Adjusters See in Split System Claims


Residential policyholders use split systems more than any other HVAC system. Indoor and outdoor components make split systems susceptible to different perils.

More than 80% of the residential HVAC systems that HVACi assessed last year were split systems, according to the CCG IQ 2021 Annual Report. Among the reasons for their popularity are that split systems easily distribute conditioned air to a specific space, are efficient, and can offer versatile installations. However, with equipment housed both indoors and out, these complex systems are susceptible to impacts from multiple hazards. Adjusters should take note of which causes of loss policyholders report most often in claims – and which perils are verified during expert equipment evaluations.

Most Often Reported Causes of Loss

Not all claims have a known cause of loss. Many claims are filed without any perils listed. Adjusters who don’t obtain equipment assessments to determine cause of loss risk giving a settlement for non-damaged equipment or components impacted by a non-covered peril.

Policyholders frequently report lightning as the cause of a failure. When an HVAC system malfunctions following a major thunderstorm, insureds often assume lightning is the source of the loss. They may further assume their HVAC systems require a full replacement. Neither are typically true.

Less than 1% of split systems assessed each year have an evaluation result that confirms direct lightning. Furthermore, minor to moderate repairs will return most split systems to pre-loss condition, regardless of peril.

Extreme weather conditions often result in new claims.

Other commonly reported causes of loss are related to the weather, including hail, wind, or freezing conditions. While they could like obvious causes of loss, claims stemming from a winter storm that affected Texas in 2021 proved that not all claims following a catastrophic event included equipment that sustained damage from a covered peril.

Perils Verified to Impact Split Systems

Nearly half of all HVAC system assessments completed by HVACi were recategorized to a different peril from what policyholders reported or the claims had listed. Many comprehensive assessment results determined equipment failed because of wear and tear or weather-related perils.

Wear And Tear

Adjusters should know that a common cause of loss impacting split systems is wear and tear, which is not typically covered by insurance. Central air HVAC systems are designed to last 15 to 20 years, according to the U.S. Energy Department; however, extenuating circumstances could accelerate wear and tear.

This peril impacts indoor and outdoor equipment. Characteristics could include, but are not limited to, visible impacts, damage caused over time, failed connections, and refrigerant leaks.

High Voltage Surge

Though lightning is frequently reported, high voltage surge is more likely. A nearby lightning strike, electrical grid changes, high-power electrical devices powering on or off, power outages, and other events that cause voltage fluctuations in the electrical circuit could trigger it.

This HVAC system control board had a noticeable arc mark caused by a high voltage surge, though visible evidence is not always present for this loss.

Like wear and tear, high voltage surge impacts indoor and outdoor equipment. Characteristics that occur with high voltage surge failures include damage caused by electrostatic discharge, multiple affected components, and immediate malfunctions. Visible evidence of high voltage surge is not always present. Find out more about how to tell the difference between HVAC failures caused by lightning, surge, and wear and tear in this guide.

Weather-Related Perils

HVAC systems are susceptible to weather-related perils. Adjusters may see increases in claims with hail, water, or wind losses following a catastrophic event.

Hail can affect several outdoor components, particularly condensing units that have malleable fins protecting the refrigerant tubes. Hail impacts may be visible but do not affect HVAC system functionality. Minor repairs such as combing or replacing the condensing coil are typical methods to return equipment to pre-loss condition.

The cause of loss may seem obvious, such as a tree limb striking a condensing unit, water flooding a basement furnace, or hail striking condensing coil. Objective assessments verify the reported peril and determine the damage scope. Even if a more major repair is necessary, full replacements aren’t required in most scenarios.

Don’t Forget About Non-Damaged Equipment

The previously mentioned perils impact split systems, but it’s important to remember that not all equipment included in claims will actually be damaged.

HVACi determined that nearly one-third of the HVAC systems included in claims in 2021 were non-damaged at the time of assessment. Settling for these adds unnecessary claims leakage for the carrier.

Equipment evaluations can prevent that. They should be objective, data-driven, and actionable. The experts at HVACi help adjusters nationwide decide claim solutions through comprehensive onsite assessments. Reports note cause of loss, best repair and replacement recommendations, and market value pricing for available equipment without slowing down the claim process. Submit a claim to confirm a peril before making a settlement decision.

Get your lightning, surge, vs wear and tear guide

Why Some HVAC Systems and Water Heaters Use Flue Pipes and Chimney Liners

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.


Watch a heating system claims webinar

Types of Geothermal Systems Guide

Geothermal systems are an environmentally friendly alternative that commercial and residential policyholders use to heat and cool their properties. Our one-page guide illustrates how these systems take advantage of the Earth’s constant subsurface temperatures and convert them into preferred indoor conditions.

Fill out the form to receive your Types of Geothermal Systems reference guide. Review the diagrams and key data points to better understand the differences in the various types of closed loop geothermal systems and open loop systems before your next geothermal claim.

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Handling Complex Residential and Commercial HVAC Claims Webinar Recording

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.

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5 Things To Know About 5 Complex HVAC Systems Guide

Chillers, Coolers, Refrigeration Systems – these words all sound as though the equipment should function in similar ways. However, their components and processes are much different, making it essential they aren’t treated the same way when they appear in claims.

Fill out the form to receive your one-page guide with 5 key facts to know about 5 complex HVAC systems likely to appear in property & casualty claims. You don’t have to be an expert on how these systems work (leave that to us), but with this guide, you’ll get a basic understanding of how and why your policyholders use evaporative coolers, geothermal systems, chillers, exhaust fans, and refrigeration systems. You’ll also learn their primary causes of loss and what percentage of systems were determined to be in proper working condition or could be repaired following our assessment.

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Less Common Commercial HVAC Systems Adjusters Should Be Familiar With

Most commercial policyholders use package units and split systems; however, other types of HVAC systems are prevalent in claims. Among them are exhaust fans, chillers, and make-up air units. It’s important adjusters know a little about each type of HVAC system – even less common ones – to ensure the most accurate settlement decisions.

Exhaust Fans

According to the CCG IQ 2020 Annual Report, exhaust fans were the third most frequently claimed system type. They are found in commercial kitchens, offices, manufacturing, and warehouse buildings and are used to remove stale air, cooking odors, and excessive moisture or heat. Among their advantages are ventilating a space to provide fresh air, improving air quality for a healthier atmosphere indoors, and removing moisture to prevent mold growth.

Exhaust fans operate by a motor turning either fan blades or a blower wheel, depending on the type, to pull contaminated air out of the building. Belt driven units rely on a belt to connect the fan or blower to the motor. In a direct drive unit, the motor is connected to the fan blades or blower wheel by a shaft or axle, and the blades rotate with the motor.

Downblast exhaust fans, left, are best for applications unrelated to cooking; whereas, upblast exhaust fans trap grease remnants left in the air so they don’t cause damages to equipment or the roof.

Policyholders may use an upblast or downblast exhaust fan, depending on their needs. Upblast exhaust fans are ideal for spaces with commercial kitchens, including restaurants or hotels. Air is blown out of the top, and, more importantly, a sealed compartment protects the motor from the heat, moisture, and contaminants being removed. Additionally, a secondary grease trap captures condensed grease to prevent it from getting onto the roof.

In contrast, downblast exhaust fans should never be used for kitchens or in places where contaminated air has grease. Downblast fans eject the air down toward the fan base and roof, which protects the motor from precipitation but could be a fire hazard if grease accumulated there. Downblast exhaust fans should be used to remove heat, stale air, and odors.

Among the predominant causes of loss are hail, wind, and smoke and fire; however, almost a third of the exhaust fan systems were in proper working condition at the time of assessment.


Chillers are commonly used in airports, hospitals, hotels, shopping malls, restaurants, temporary structures, and industrial or medical facilities. They transfer heat out of a space using water or a water solution instead of air. Policyholders may have water-cooled or air-cooled chillers; however, the initial process is the same.

Warm water enters the evaporator unit from the primary return coming from the building’s Air Handler Units (AHUs) and its heat is transferred to the refrigerant. The now cooler water is then pumped by a water pump through the primary supply back to the AHU. A blower and the ductwork bring in air from the facility, and the water absorbs its heat. The now cooler air is supplied back to the conditioned space through the ductwork. This process is similar to that of a traditional HVAC split system or package unit. The warmer water then returns to the evaporator to restart the process.

The processes for how water-cooled and air-cooled chillers work are almost identical except for the method used to transfer heat from the refrigerant.

The difference between air-cooled and water-cooled chillers is how the refrigerant transfers out the heat it absorbed from the water. Refrigerant moves from the evaporator to the compressor, which increases the refrigerant’s pressure and temperature, and then it goes to the condenser. In water-cooled chillers, water surrounds the refrigerant pipes to absorb the heat and then is pumped into a cooling tower to release the heat. Meanwhile refrigerant goes through the expansion valve to reduce its pressure and temperature and restart the process. In air-cooled chillers, fans bring outside air through the condenser, which absorbs heat from the refrigerant, and expels it to the ambient air – much the same as the process for traditional split systems and package units.

Despite the complex processes, chillers may be preferred over traditional split systems and package units because water conducts heat 25 times better than air. Each chiller type also has advantages. Water-cooled chillers are better at conducting heat, are more consistent, and are best for medium to large facilities, though they require a stable water supply and a lot more maintenance. Air-cooled chillers, which are better for small to medium facilities, have lower installation costs, less maintenance, and require less space.

Among the perils affecting chillers are corrosion and poor maintenance, which are linked with wear and tear, as well as electrical problems caused by wear and tear or high voltage surges.

Make-Up Air Units

Make-up air units aren’t claimed as often; however, when they are, make-up air units are frequently determined to be non-damaged, making damage assessment essential. As the name implies, make-up air units compensate for air that was removed through process exhaust fans or other mechanical means. While exhaust fans draw air out of a facility to the outside, make-up air units reclaim fresh air from outside to bring it into the building. However, unlike ventilation fans that bring in outside air without changing its temperature, make-up air units can temper air so the heating or cooling system won’t have to work harder or waste energy.

Make-up air units provide tempered fresh air into spaces that have a lot of mechanical ventilation taking air out.

Make-up air units are typically used in industrial or other similar commercial applications, such as restaurants, warehouses, or distribution centers. These are areas where more ventilation is required to improve air quality and protect health. If too much air has been exhausted by mechanical means and isn’t replaced, the space can become depressurized. Having a make-up air unit deliver fresh air can restore the pressure and balance and contribute to the overall Indoor Air Quality, which may be part of a local, state, or federal regulation.

Types of make-up air units include direct gas-fired, indirect gas-fired, and non-gas fired. Direct fired units heat outdoor air directly through combustion of natural gas by an air burner. Indirect gas-fired make-up air units have combustion products discharged through a flue rather than within the supplied air. Non-gas fired options use electric, hot water, or steam heat as an alternative to gas.

Predominant causes of loss for make-up air units are hail, wind, and high voltage surge. Make-up air units are most frequently included on hail claims if they are on the roof. But since they don’t have any coils and have strong metal cases, they typically aren’t damaged by hail. Adjusters should make sure they aren’t settling for non-damaged equipment.

Consider Expert Assessment Before Settling a Claim

Due to the complexity of commercial HVAC systems, carriers can benefit from expert evaluations. HVACi is the nation’s leading provider of HVAC and Refrigeration damage assessment services for insurance carriers. Our team uses its HVAC system knowledge and experience to enable adjusters and insurance personnel to confidently settle claims based on data-driven testing, actionable reports, and prompt cycle times.

Dealing with a claim that has an HVAC system you aren’t familiar with? Submit a claim to receive cause of loss, scope of damage, and repair and replacement recommendations to return your policyholder’s system to pre-loss condition quickly and fairly.

Complex HVAC Systems Guide