Geothermal systems offer policyholders a more energy-efficient method of heating and cooling their homes and businesses by taking advantage of natural resources. However, these non-traditional systems could lead to claims being submitted with different kinds of equipment that adjusters aren’t used to working with.
Our one-page Geothermal System Basics guide explores how they work, compares the different types, and notes some of the most frequent perils impacting them. Fill out the form to receive your copy today.
Policyholders can heat and cool their properties in a more efficient way by letting the Earth’s natural subsurface temperatures do most of the work. These systems use a geothermal heat pump and geothermal loops buried below the frost line to condition warmer and cooler air through heat transfer. Because they aren’t as prevalent as other traditional heating and cooling systems, adjusters should understand how these systems work for when they wind up in claims.
What Makes Geothermal Systems Different?
Geothermal systems have underground pipes and a heat pump to use the Earth’s temperature to warm and cool a home or business.
Traditional furnaces and boilers require burning oil or gas in a combustion chamber, but this isn’t necessary in a geothermal system. The Earth maintains a constant average temperature between 50-60 degrees Fahrenheit 20-30 feet underground regardless of weather and temperatures at the surface. This gives geothermal systems the advantage that the amount of energy needed to condition air to be warmer or cooler is roughly the same year-round versus a traditional HVAC system working harder depending on the outside temperatures.
To warm a facility, the fluid inside the geothermal system’s pipes, including water, refrigerant, or antifreeze, increases temperature from the warmer underground rock, soil, or water. A heat exchanger transfers the heat from the fluid to the building’s heating system to warm the air, and the now-cooler fluid returns to the ground to be warmed again. To cool a structure, the heat is taken out of the building and the fluid in the pipes expels the heat while underground.
According to the U.S Department of Energy, geothermal systems can reduce energy consumption by 25-50% compared to traditional air source heat pumps, and geothermal heat pumps reach efficiencies of as much as 600% on the coldest nights. Other advantages of geothermal systems are that they are quieter, have a longer lifespan, and need little maintenance.
Geothermal systems are more expensive, costing around $15,000; however, policyholders will likely recoup that cost in energy savings over the lifespan of the system. Plus, tax credits are possible. A tax credit expired in 2016, but it was reinstated in 2018 and was retroactive. It initially offered 30% of the amount the owner spent to install it, but the tax credit decreased to 26% in 2020 and will decrease to 22% in 2021. After that, the federal tax credit is scheduled to expire unless Congress approves to extend or renew it.
What Types of Claims Will You See This In?
Property characteristics affect where or how geothermal systems may be installed, but they can be used in commercial and residential properties.
Residential systems can be placed on single or multi-family lots, including under lawns or driveways. Homes built with a traditional HVAC system can be retrofitted for geothermal systems using installed ductwork.
Commercial properties may also benefit from the geothermal system’s cost-effectiveness, energy efficiency, and the fact they are more environmentally friendly. It has been used in schools, high rises, government buildings, apartments, and restaurants as well as for agricultural and industrial facilities.
What Are the Different Types of Geothermal Systems?
Two distinct differences in the types of geothermal systems are whether they are closed or open loop and what they are buried in.
Closed loop systems typically have the geothermal loops, which can be plastic pipes, buried in the ground or under water. The fluid inside continuously circulates. A heat exchanger transfers heat between the refrigerant in the heat pump and antifreeze in the pipes. A variation to this is the direct exchange where the refrigerant circulates through copper tubing underground without a heat exchanger and a larger compressor is needed; however, many government regulations prohibit refrigerant being underground because of potential environmental impacts.
Closed loops can be buried horizontally or vertically. Horizontal loops may be more cost-effective for residential properties, particularly for those with enough land. Pipes buried vertically may be better for commercial buildings because the systems would be larger scale, but less land and landscaping are impacted. The holes can be drilled 100-400 feet deep and the pipes are connected at the bottom with a U-bend pipe.
A geothermal system doesn’t always have to be buried in land. A similar process can be completed under water, which may make it the least expensive option. The pond or lake must have an adequate supply so that the pipes can be 8 feet under the surface where water won’t freeze.
Open loop systems require well water or surface water because that is used in place of heat exchange fluid. Instead of being continually used, water returns to the ground as surface discharge once it leaves the building. However, the water supply must be maintained, and policyholders must adhere to discharge rules that are created and enforced by local ordinances, codes, covenants, or licensing requirements.
A hybrid system that uses both underground geothermal systems and an air source heat pump is also possible, and it’s particularly effective in places where cooling is needed more than heating.
Why Do These Systems Fail?
A sump pump failure caused severe water damage to this geothermal system by corroding some of the equipment.
Energy efficiency and longer lifespan are advantages to having a geothermal system, but they do sustain damages like any other system type.
Leaks from the pipes could cause refrigerant to go underground or in the water source. Any water contamination could be harmful to plants or the water supply. This is particularly important in open loop systems, which should be filtered and free from debris.
Another potential concern is the heat exchanger coils could become corroded and stop the component from exchanging heat.
HVACi assessed hundreds of geothermal systems that appeared in property insurance claims in 2019. High voltage surge and wear and tear were the most frequent cause of loss; though, other perils included smoke and fire, freezing conditions, water damage, and unauthorized modifications. In many claims, the system was found to be in proper working condition at the time of assessment.
The average repair cost for geothermal systems claims assigned to HVACi was $1,261 compared to the average total replacement cost of $14,092.
When Should You Get Help Assessing a Geothermal System?
It’s important to always have an expert assess equipment that you aren’t used to dealing with. Most geothermal system claims that were assigned to HVACi were filed with a stated unknown cause of loss. Our staff used their knowledge and experience with these systems to find actual cause of loss and make recommendations for repairs or replacements based on findings. Submit a claim to learn more about our process in supporting insurance carriers and adjusters in handling these and other claims related to HVAC systems accurately, fairly, and quickly.
Many of us are familiar with the most frequently used HVAC systems that force warm and cool air through ductwork throughout a building to maintain the preferred temperature over multiple rooms or large spaces. Though less common, there are times when a ductless system, including mini-split systems for single and multi-zones, may be the better choice for a property owner.
It’s important to learn the basics about ductless systems to better understand how to handle your next claim related to a ductless HVAC system.
What is a ductless system?
Ductless HVAC systems deliver air directly into a room or zone through minimal tubes and passageways. These mini-split systems have an outdoor condenser and an indoor evaporator with a blower section, which are connected by way of a 3-inch hole in the wall for power and communication cables, copper tubing, and a condensate drain line.
Single-zone mini-split systems typically allow someone to control the temperatures to an individual area. Multi-zone mini-split systems allow more than one area to have temperature control from a single outdoor condenser, without needing ductwork.
Ductless systems deliver air directly into a room or zone without the controlled air traveling through ductwork.
Advantages and disadvantages of ductless systems
Ductless systems have their advantages, including offering flexibility in where they are used, needing less wall space, and being more cost-effective than window air-conditioning units, space heaters, or electric baseboard heaters. Other benefits are that they are more energy-efficient because many of them use DC compressors with lower amp draws, are quieter, and are better for allergy sufferers because they reduce contaminant build-up and offer continuous air movement that improves ventilation.
The major disadvantage of ductless split systems is its initial cost compared to other options. Like any HVAC system, ductless systems also require some routine maintenance, including filter cleanings and getting rid of nearby dust and debris, to avoid malfunctions. Unlike some of the other portable options, mini-split systems are permanent fixtures so they can’t be moved from room to room or around the room.
Where are they used?
Older homes benefit from having ductless systems. Most older homes were not built in a way that can accommodate modern ductwork. Ductless systems preserve architecture and don’t need carved spaces for ductwork and vents. Plus, ductless systems offset energy loss.
Sunrooms and small spaces benefit from ductless systems as they take less wall space.
Garages, room additions, and places not connected to a property’s main HVAC system can use ductless systems.
Rooms with hot and cold spots can maintain a more even temperature using ductless systems.
Mini-split systems have outdoor condensing units, which make them susceptible to hail or other perils that traditional HVAC systems face.
Ductless systems sustain similar perils to their larger counterparts
Single-zone and multi-zone mini-split systems are still prone to similar damages as other HVAC systems with ductwork.
We studied data from the 2019 claims assigned to HVACi to consider causes of loss typical to ductless systems. High voltage surges accounted for more than a third of the mini-split system claims. The next two most prevalent causes of loss were hail, because of the outdoor condenser like a typical split system, and wear and tear. Repairs were frequently recommended for the hail claims.
As an adjuster, it’s important to understand a variety of complex equipment, including different types of HVAC systems.
Have a claim with a ductless system you need assistance with? HVACi can help by providing a comprehensive report with cause of loss and recommended settlements in a timely manner.
Ductless systems aren’t as commonly used as other types of HVAC systems, but what makes them unique is what you may need to know in order to handle claims that include them.
Our guide of 6 Things to Know About Ductless Systems provides a quick overview of what they are and how they work, where they are most likely to be found, and their advantages and disadvantages. Plus, we go over perils ductless systems face that may cause damage that’s likely to show up as a claim on your desk.
Getting Warmer: An Introduction to Air Source Heat Pumps
You get plenty of HVAC claims coming across your desk as an insurance adjuster, but not all HVAC systems are the same. Traditional split systems may be the most common, but heat pumps are quite popular, particularly in milder climates like the south. You want to make the best calls when deciding on these claims, so it’s best to be informed.
We have created a 7-minute video that offers a brief introduction to heat pumps and how they work to heat a conditioned space. Our video outlines:
How to tell if a unit is a heat pump;
How they generate heat; and
Additional components that you may find in a heat pump.
Learn the basics of heat pumps and be more confident in your evaluation of these claims. Watch our heat pump video by filling out the form provided.
There are several different types of HVAC systems, and, as an insurance adjuster, you need to be prepared for whatever kind of claim comes across your desk. The most common type of HVAC system you’re likely to see is the traditional split system, so you really want to be familiar with these so that you can handle these claims quickly and effectively.
HVACi is all about equipping adjusters with the information they need, which is why we have created a short, easy-to-follow video explaining how traditional split systems work to cool a conditioned space, and it’s specifically designed for insurance adjusters like you.
Be in the know! Fill out the form now to watch the Split Systems Video for yourself.
Here and There: The components of split system HVAC units
The most common type of residential HVAC unit in the United States is the split system, where one section of the HVAC is outside and another is within the home (usually in an attic, basement, or crawlspace). This style of HVAC system is also quite common among commercial buildings, as well. As a result, thousands of split system HVAC claims flood insurance companies every year.
If you have a policyholder that comes to you with a claim on their split system, you want to be ready to assess and process the claim as quickly as possible, and that’s hard to do when you aren’t an HVAC technician and don’t have a thorough understanding of split systems. Thankfully, you don’t have to be an expert to read an estimate or report from a contractor; we’ve taken care of that for you with our split system components glossary and schematic. It’s easy to read, clearly labeled, and concise.
Be more efficient and knowledgeable in your claims. Download our split system glossary by filling out the form provided.
Heat pumps, like traditional split systems, remove heat from homes or businesses, but unlike straight cooling units, they also can bring heat into the building rather than requiring a separate furnace or boiler. This makes heat pumps a common choice for those living in more moderate climates, such as Georgia or North Carolina. But what makes up a heat pump system?
Not everyone has this information at the ready, but as an insurance adjuster, you need to be able to quickly access this material, especially once you get the contractor’s assessment and estimate. That’s why having a heat pump schematic with a glossary of parts is so handy. At HVACi, we’ve crafted a quick reference guide to the components of heat pumps and explained the functions of each part in straightforward terms. It’s great to have on hand to look at when those heat pump claims come in.
Get an edge when dealing with heat pump claims now. Download our heat pump glossary by filling out the form provided.
Many HVAC claims require some attention to ductwork. After all, the ductwork carries the heated or cooled air from the HVAC system to the rest of the building, whether it’s a home or business. As an adjuster, you don’t have to be an expert to be confident when handling claims that include ductwork. Here are a few basics about frequent perils that affect ductwork and what to consider to ensure accurate evaluations for a fair resolution.
What Perils Are Most Likely to Impact Ductwork?
Just about anything could impact ductwork, given the right circumstances (lightning can strike into an attic and hit a duct, for example, but that’s uncommon), and the cause of loss can drastically affect your customer’s claim. A number of problems can affect ductwork, but the four most common perils we see are water, microbial growth, smoke and fire, and infestation.
Water
Water damage to ductwork can come in a variety of different forms. Water can inundate an area from a flash flood, roof leak, or damaged appliances (i.e. water heater, bathtub, dishwasher, etc.). If this happens and the ductwork is in the basement/crawlspace or if the returns are in the floors, water can easily get into the ducts. Another way water damage occurs is due to condensation (also called “sweating) in the ductwork. Depending what the ducts are made from, the water can be absorbed or cause cracks or tears, compromising the structural integrity or causing leakage and potentially even leading to other losses.
The clear water line and buildup in this ductwork are evidence of water damage.
Microbial Growth
Microbial growth thrives in places with high humidity. If moisture is introduced, ductwork becomes an ideal breeding ground for growth and bacteria. Of course, the ducts carry air throughout the house, not only spreading the spores or bacteria for people to breathe in but also potentially carrying it to other areas, allowing it to spread and cause more damage elsewhere.
Microbial growth is common in and around ductwork that is exposed to moisture.
Smoke and Fire
If a fire breaks out in an insured location, damage to the ductwork is likely. Even if the flames themselves never touch the ductwork, smoke travels very quickly and easily, meaning that the ducts are likely to have at least some smoke damage. If the HVAC system is running during the fire, the smoke can spread to the entire system, causing damage throughout. Ducts move the air we breathe in air-conditioned environments, so if there’s smoke and soot in the ducts, the occupants are likely to smell it. Moreover, if the flames did impact the ductwork directly, the structural integrity of the ducts themselves could be compromised.
Soot and ash can build up in ductwork even if it was not directly affected by the flames.
Infestation
Plenty of critters like to find dark places for shelter, and unfortunately, ductwork fits the bill. Sometimes a claim might come in that is caused by mice, rats, raccoons, squirrels, or even an armadillo (yes, it has happened; we’ve seen some weird things). These little creatures can wreak all kinds of havoc on an insured’s ductwork – feces can create odors and cause sickness, urine can cause metal ductwork to rust, scratches can compromise the structure of the ductwork – all of which needs to be addressed in order to maintain the health and safety of the insured location.
A raccoon has made a mess of this ductwork.
Things to Consider When Making Ductwork Claims Decisions
Ductwork isn’t as straightforward as some other components of HVAC can be. There are several factors to take into consideration when you’re making a decision on a claim that involves ductwork. You want to think about:
The Type of Ductwork: The type of ductwork used on the property will not only determine the cost of returning it to pre-loss condition but also how to achieve this restoration.
The Extent of Damage/Amount of Ductwork Damaged: This is probably the most straightforward aspect of ductwork evaluation – if more linear feet of ductwork is damaged or if the damage is too great, it may not be worth it or even possible to clean or repair it.
HERS Testing in California: Any time certain alterations or replacements are made to an HVAC system in California, testing is required using the Home Energy Rating System (HERS). This testing may require the ductwork to be replaced (depending on how much ductwork is in question), and you need to take this into account when trying to restore insured equipment to pre-loss condition. For more on this, check out our HVAC Regulations Guide for Adjusters.
Whether You Can Clean, Repair, or Replace: You need to figure out which course of action will most efficiently and effectively bring the insured’s ductwork back to pre-loss condition. Replacement is sometimes necessary, but don’t assume it’s best for all claims. Ductwork may only need a good cleaning or repair, and applying one solution to all situations can lead to inaccurate settlements.
Make the Right Decisions in Your Ductwork Claims
As an adjuster, it’s not always easy to determine the best course of action for a ductwork loss or how to restore the insured’s equipment to pre-loss condition. Even if you’re not an expert, you can ensure you’re making the right call by arming yourself with fundamental knowledge and obtaining an unbiased expert assessment.
HVACi’s nationwide network of vetted and trained technicians perform industry-leading assessments on HVAC and refrigeration systems, including a variety of ductwork. Submit an assignment to learn how an inspection based in just the facts can lead to accurate claim resolution.
Ductwork moves air through a conditioned space, so when they’re damaged, an HVAC system needs to work harder and the air being pumped into the space is compromised. Dust, mold, soot, rips, holes, cracks, and other damages can cause a number of problems in the ductwork, and the solutions aren’t always immediately clear. Many times, contractors will suggest replacing ducts, but what if that isn’t always necessary? What if you can save your company and your customer money by knowing more about ductwork?
We want insurance adjusters like yourself to have the information they need to make an accurate claim settlement, so we’ve put together a straightforward guide to the types of ductwork and how these different types can affect the settlements to these claims. We even include claim statistics, pricing considerations, and regulations that you should take into account whenever handling ductwork claims. This way, you have a better idea of the options available to you and the customer when settling them.
Be prepared for ductwork claims! Get your free Guide to Common Types of Ductwork and How They Impact Claims today by filling out the short form provided.
Geothermal systems have underground pipes and a heat pump to use the Earth’s temperature to warm and cool a home or business.
A sump pump failure caused severe water damage to this geothermal system by corroding some of the equipment.
