Category: Winter Losses

4 Items Common in Freeze Damage Claims

Heating equipment undergoes unusual stress during the winter months, particularly when temperatures fluctuate. This stress may result in freeze damage, including cracking and fuel clogging. Some HVAC components are more likely to be included in claims related to cold weather than others, and adjusters should be familiar with the conditions that lead to freeze damage. We’ve identified 4 items commonly found in claims related to freezing conditions: copper and PEX piping, radiators, fuel lines, and boiler heat exchangers. Here’s why they may be susceptible to losses due to dropping temperatures.

1. Copper and PEX Piping

The sudden changes in temperature during the winter months can cause a home’s piping to expand and contract. The additional stress may trigger pipes to burst, which could result in water damage to the surrounding area. Fortunately, copper and PEX piping is usually easy to repair. A comprehensive assessment could determine how much of the piping is affected and needs to be repaired.

Freezing temperatures caused this boiler pipe to burst, allowing water to flow out of the crack and damage other HVAC equipment nearby.

2. Radiators

Due to their proximity to exterior walls and windows, radiators frequently encounter outdoor temperatures. Cast iron is particularly susceptible to the stress caused by freezing temperatures and are more likely to crack than less brittle materials. Cracked cast iron radiators will likely need to be replaced. The pipes in baseboard radiators can also freeze, but they may be repairable.

This radiator has cracked due to freeze damage and will need to be replaced. 

3. Fuel Lines

Low temperatures can cause the oil in an oil-burning furnace or boiler to gel and clog the fuel lines. This obstruction could cause an incomplete combustion and prevent proper operation of the system. However, it’s also possible that oil furnace clogs are the result of lack of maintenance. An expert should be consulted to verify the cause of loss.

The oil in fuel lines and filters may clog during cold weather.

4. Heat Exchangers

A boiler may cease operation for a variety of reasons, including a power surge, lack of fuel, or an issue with the thermostat. As the ambient temperature drops, water within the heat exchanger can freeze and cause the heat exchanger to crack.

Leaking water in this boiler froze and damaged the heat exchanger.

However, heat exchanger failures may be caused by wear and tear. Adjusters should have boilers properly assessed before settling claims.

HVACi helps adjusters by assessing HVAC and refrigeration equipment included in claims on behalf of insurance carriers. Our country-wide network of experts provides thorough, evidence-based recommendations when adjusters need them most.

Have a claim with HVAC or refrigeration equipment where freezing conditions are the suspected cause of loss? Submit a claim to HVACi. We’ll complete a comprehensive onsite assessment to determine the actual cause of loss and scope of damage and recommend repairs or replacements to return the equipment to pre-loss condition.

Fill out the form to get your copy of our Multi-Unit Freeze Damage Case Study to learn more about HVACi’s experience in assessing large weather-related losses.

Diving into the claims data from a Texas winter storm

The following article on “Diving into claims data from a Texas winter storm,” written by Jay Dykstra of HVACi and StrikeCheck, was originally published on Property Casualty 360.

This time last year, many adjusters were still digging out from the hundreds of thousands of claims that resulted from Winter Storm Uri. By July, settlements had reached billions of dollars and a Texas Department of Insurance report stated there was an expectation to give $5.8 billion in payments to policyholders in Texas, where the storm was particularly destructive and led to half a million claims. Newly released data about some of the items included in claims from the storm pinpoints issues carriers should consider during the next extreme weather event.

Power outages, fallen trees, freezing conditions and other related perils caused many of the losses that occurred in Texas in February 2021. However, it is important to note that even if a cause of loss seems obvious, the peril is not always the reason for a failure. Additionally, everything included in these claims wasn’t damaged.

Adjusters relied on third-party assessment vendors, including HVAC Investigators (HVACi), for quick and comprehensive damage assessments of HVAC systems included in Texas storm-related claims. More than half of the HVAC system claims that adjusters assigned to HVACi had freezing conditions as the reported cause of loss, and 14% listed water, according to the CCG IQ 2021 Annual Report that provides data and trends about hundreds of thousands of property items carriers assigned CCG IQ’s family of brands to assess last year.

Both these condensing units had reported losses from freezing conditions in Texas; however, one sustained damage from water and the other wasn’t damaged at the time of assessment.

Neither freezing conditions nor water were in the top three perils that HVACi determined impacted HVAC systems included in Texas claims during this time. Instead, one-third of the assessed HVAC systems sustained damage from wear and tear, which is not typically a covered loss.

Heat pumps more than 15 years old are more susceptible to failures when the temperatures drop into the teens. A wear and tear determination is also common because policyholders will file claims citing a catastrophic event, even if the damage is unrelated.

Many claims included non-damaged equipment. Nearly 20% of the HVAC systems the company evaluated were not damaged at the time of assessment. Settling claims with assessment results of wear and tear or non-damaged risk creates unnecessary claims leakage.

Multiple HVAC system losses from the Texas claims also tied back to the widespread power outages and, of course, the weather. The CCG IQ 2021 Annual Report’s section on the Texas Winter Storm showed that 18% of HVAC systems sustained damage from a high voltage surge, 11% from freezing conditions, and 9% had a water loss.

HVAC systems have several electrical components, including the control board and thermostat, that can sustain damage from a sudden voltage fluctuation. These may be caused by power suddenly returning, among other reasons. HVAC systems can also withstand a certain level of water before major repairs or replacements are required.

Adjusters should know that even with the severe circumstances Texas faced last year, less than one-third of the HVAC systems HVACi assessed after the storm required a full replacement. More than half could be returned to pre-loss condition through repairs, and the rest did not require any action.

The next time there are a significant number of claims after a catastrophic event, adjusters should not assume equipment failures are the only reason for the problems. Verify the cause of loss and scope of damage before making an unnecessary settlement.

Jay Dykstra is the technical education manager for HVACi and StrikeCheck. He is responsible for the development, presentation, and curation of technical education content for adjusters and insurance claims professionals.

When Malfunctioning Furnaces Are Less Likely To Be Covered

The following article on “When Malfunctioning Furnaces Are Less Likely To Be Covered,” written by Jay Dykstra of HVACi and StrikeCheck, was originally published on Property Casualty 360.

The Weather Channel has predicted a shift to colder weather in the northern part of the country this month. That, combined with a milder fall, could have had policyholders turning their heaters on and off the last few weeks, and they may notice it not working as well.

Different heating sources, including furnaces, heat pumps and boilers, maintain insureds’ preferred temperatures in the cooler months. The most frequently used is a furnace, which is a type of forced air system and can be part of a split system. Expensive repair or replacement estimates send policyholders scurrying to file insurance claims; however, adjusters should know traditionally non-covered losses are likely the cause for many furnace damages.

Reasons a furnace may malfunction

A furnace uses fairly simple processes. The insured sets the temperature on the thermostat, then a heat source warms the air directly or through a heat exchanger. The most common heat source is natural gas; however, policyholders may use oil-burning furnaces. Other less common heating sources are propane or the use of electric heating elements instead of fuel. The heated air blows through the ductwork to supply registers throughout the property.

Any issues with the components could cause the system to not operate as designed and lead to a claim.

Furnace components all work together to maintain preferred temperatures, but if one malfunctions, the policyholder may file a claim for a loss that shouldn’t be covered. 

Cracks in the heat exchanger

The most common furnace failure is a cracked heat exchanger. Rusted or corroded areas may result in holes or cracks. Thermal fatigue can also cause the metal to deteriorate and crack from constant changes from heating to cooling. These circumstances are signs of long-term damage – often from age-related wear and tear or a lack of maintenance, which insurance policies don’t typically cover.

Clogged components

At least two types of clogs may occur in a furnace that can sometimes lead to severe damages, and both are often due to a lack of proper maintenance.

A clogged burner full of dirt, dust, fuel residue, rust or corrosion can cause a misfire. The heat exchanger could then receive excess fuel, depending on the type of system. A clogged or cracked fuel nozzle could also allow incorrect amounts of fuel to enter the system.

Excess fuel could cause a puffback, which is when unburned fuel builds up within the heat exchanger and ignites, resulting in a pushback of soot or oily smoke to be dispersed into the supply air or ductwork. Oil-burning furnaces are more susceptible to this event.

Puffbacks in furnaces and boilers have at least seven known causes, but almost all of them link back to wear and tear or improper maintenance.

Why Boiler and Furnace Puffbacks May Not Be Covered by Insurance

Colder months for some of your policyholders can get a little messy. During this time adjusters are likely to see an increase in claims that include furnaces and boilers because of puffbacks, which occur when heating systems turn on and could cause soot to go everywhere.

A puffback is an event in which a buildup of unburned fuel ignites and pushes back out of the burner section instead of burning cleanly into the burner area. Puffbacks can release smoke or soot throughout the heating equipment or into a forced air system’s ductwork. This could cause a lot of property damage, but it’s important adjusters know that puffback incidents most often stem from a non-covered loss.

Why Puffbacks Occur to Heating Equipment

This boiler sustained a puffback after the system misfired and built up excess fuel in the heat exchanger.

Furnaces and boilers that use oil as their fuel source are more susceptible to puffbacks, though they can occur to those that run off gas too. The differences are the increased amount of maintenance required with oil furnaces and boilers and that excess oil is harder to dissipate than gas. Puffbacks in gas equipment are not very common.

Puffbacks are a sign that an issue exists within the system. Something has caused oil or gas vapors to build up within the heat exchanger and ignite when the system turns on. The force of all of it igniting at once causes the puffback, which could range in severity. Puffbacks could happen during one incident or every time the heating system starts, depending on what’s causing them.

Buildups of gas and oil typically occur because of a component not working as designed – and nearly all of them link back to wear and tear.

Causes of fuel buildup include:

1. Leaks near the heat exchanger that lead to excess fuel getting in
2. A policyholder manually resetting the system too often if it doesn’t start right away and leaving unburned fuel to accumulate
3. A clogged burner full of dirt, dust, fuel residue, rust, or corrosion can cause a misfire and allow excess fuel in the heat exchanger, depending on the type of system
4. A clogged or cracked fuel nozzle could cause incorrect amounts of fuel to enter the system. If there is too little, it will continue to spray, which could lead to the presence of excess fuel to burn when the system does successfully start

Another reason fuel can build up is from internal pressure irregularities, which lead to air and fuel imbalances. Components malfunctioning from wear and tear may cause this.

The burner to this furnace was clogged with dirt, dust, fuel residue, rust, and corrosion over time due to lack of maintenance. This reduced the flow of combustion gases through the furnace and resulted in an internal pressure irregularity.

Explanations for internal pressure irregularities:

1. Dirt, dust, fuel residue, rust, or corrosion can obstruct an exhaust or chimney and inhibit proper ventilation
2. A cracked heat exchanger could keep combustion gases from venting out of the furnace. This could allow gases to get in the heat exchanger and cause an internal pressure irregularity

Why Aren’t Furnaces and Boilers Typically Covered After a Puffback?

 

Whether a puffback is covered by insurance depends on the carrier and the policy. For some policyholders, insurance may cover the repairs and replacements required for property affected by the soot and smoke. However, many policies won’t cover the malfunctioning heating system itself without mechanical or equipment breakdown coverage. That’s because most of the issues that lead to puffbacks are signs of poor maintenance or wear and tear, which policies don’t typically cover.

Prevention is possible through having regular furnace and boiler maintenance, scheduling routine cleanings to eliminate debris and buildup, replacing the oil filter to keep oil as clean as possible, paying attention to unusual leaks or noises, and using a carbon monoxide detector. Carbon monoxide typically increases when puffbacks occur and a detector can alert a policyholder.

If proper maintenance by an HVAC system expert isn’t completed, puffbacks may occur and result in a property claim.

Signs of Puffback Vs. Another Peril

The policyholder claimed this furnace was damaged due to smoke and fire; though, the cause of loss was wear and tear from naturally occurring corrosion and exposure to heat over time.

It may not always be obvious whether the damaged HVAC system cause of loss was wear and tear or another peril, such as smoke and fire. Testing for a puffback can include evaluating for leaks, assessing for clogs, or performing a candle check, which is monitoring the flame of a lit candle held near a blowing heat exchanger.

However, a policyholder should never complete these actions to determine if a puffback occurred. They can be dangerous and so is this equipment if handled by an untrained person. It’s also important that an objective expert assess the damage to ensure the policyholder – and the carrier – is only making repairs and replacements that are required. This eliminates unnecessary claims leakage for a carrier and helps both the policyholder and carrier better understand the best course of action to return equipment to pre-loss condition.

HVACi is the nation’s leading damage assessment company for HVAC and Refrigeration equipment. Our trained, objective experts know what to look for when evaluating for a puffback or any other peril that causes equipment damage. We provide adjusters with comprehensive assessment reports in a short amount of time that include cause of loss, scope of damage, and repair and replacement recommendations as well as verify if the equipment is available and Like Kind and Quality. Don’t settle a claim for something that was caused by a non-covered peril. Submit a claim to HVACi for an accurate claim resolution.