While your mortgage lender requires you to have homeowners’ insurance, in almost all circumstances, you should keep the policy after you pay off your home. If you let the policy expire or cancel it, you do a major disservice to yourself. Any damages you experience later will require that you pay out of pocket to fix them. Be sure to read the fine print, as your policy will list what types of damages it will pay for.
Dwelling Coverage
Every company that offers homeowners insurance will usually cover a new air conditioner if you file a claim for damage caused by a covered peril. Comparing policies can help you find a company that offers the protection you need. These all appear under your standard coverage.
Dwelling coverage usually protects your home, garage, and any other buildings on your property. It will pay to repair, replace, or rebuild any part of your home, including a central AC system. A dwelling coverage policy will usually pay for your air conditioner if you can prove it suffered damage for one of these events:
- Hail
- Fire
- Windstorms
- Tornadoes
- Lightning strikes
Additionally, you may be able to opt for coverage in the event of vandalism or damage from a vehicle or aircraft. Sometimes, you can find a policy that includes personal property coverage when you purchase dwelling coverage. This type of policy will also cover things like portable or window air conditioners. Though this typically only covers the actual cash value of the unit, you can add replacement coverage to your policy.
Deductibles and Coverage Limits
While many homeowners’ policies cover air conditioners, it depends on both your deductible and coverage limit. Like health insurance, your deductible shows you how much you need to pay out of pocket before your insurance will pay out.
Your policy also has a coverage limit, which is the total amount the company will pay when you file. If you have a policy that includes $10,000 in coverage with a $2,000 deductible and you file a claim for a new AC, the company will only pay $8,000. It expects you to pay the remaining amount out of your pocket.
Experts often recommend that you have a minimum of $100,000 in total coverage. Some companies may cover a replacement AC as long as the cost isn’t more than 10% to 20% of your total limit. If you have a $100,000 policy and need a new AC, your policy might cover it as long as it doesn’t cost more than $20,000.
There usually isn’t a limit to how many claims you can file. However, two claims within five years will generally cause the insurer to charge more to insure your home because you’re a liability, increasing your premiums. If you have an annual plan and file twice within 12 months, the insurer may decide to cancel your policy. This can include seeking help for a new air conditioner after a storm and reporting a burglary a few months later. You usually won’t see any changes to your policy if you require a new AC and other repairs if the damage is from a covered peril.
When Is the Air Conditioner Not Covered?
A homeowner’s insurance policy will not pay for a new AC if you need a replacement for a non-covered peril. This includes conditions that may be beyond your control, such as damage from insects, birds, rodents, and other animals. Flood, earthquake, mudslide, rust, and mold damage are also not usually covered.
Your insurance will also not pay for an AC failure due to worn-out parts. This type of coverage might be available with a home warranty. Be sure to check if you have a home warranty and what it covers. But be sure to keep up with your regular maintenance. Most warranties won’t cover damage or failure due to neglect.
When to Replace Your AC
We offer many services for AC owners in the Commerce City, CO area, including installing new systems, maintaining existing units, and repairing any damage you see. You’ll also find indoor air quality improvement products for sale through us and heating repairs, installation, and maintenance. Call Smith & Willis Heating & Air Conditioning when you need to replace your AC whether or not your insurance will cover it.
