Does Homeowners Insurance Cover AC Units?

Life without air conditioning for homeowners in southern states seems like an impossibility. Steamy springs and scorching summers quickly take a toll on even the bravest souls. So, when your air conditioner breaks down, you’ll probably be looking for relief as quickly as you can.

Can you turn to your homeowners insurance for help? Below, we’ll take a look at when air conditioner repairs and replacements are covered by your insurance. We’ll also go over when water damage from your air conditioner to your house is covered by your policy. 

Your air conditioner is covered by homeowners insurance in the same way the rest of your home’s structure and personal property are covered. If the damage was caused by a covered peril, such as a hurricane or lightning storm.

However, if the damage was caused by general wear and tear, slow leaks, years of use or another type of incident that isn’t quick and unexpected, your homeowners insurance policy won’t cover the damage to the unit and likely won’t cover the damage to your property caused by the AC unit.

Some of the most common covered perils that tend to damage AC units are the following nine instances:

If the damage your air conditioner sustained was a direct result of one of these (or any peril in your policy), then your insurer may reimburse you for the damage. For example, you should be covered if hurricane winds blew debris into your central AC unit on the side of your house and destroyed it, Or, you should be covered if lightning struck your unit and caused it to stop working.

As another example, if lightning strikes your home or a power line by your home, causing your AC unit to surge and spontaneously explode (or just fizzle out with sparks), your homeowners insurance would likely cover the damage. If all that happened plus your AC unit caused a fire in your home, that would likely be covered, too.

However, it’s always best to consult your insurance agent to see what’s covered. There are a few different types of homeowners policies, so they can tell you exactly what is and isn’t covered by your specific policy.

That said, there’s a difference between central air conditioner units and window units, as well as standard homeowners insurance policy and an open-peril homeowners insurance policy.

While it’s highly unlikely one policy would provide coverage and the other wouldn’t, let’s take a deeper dive into the important things to know about air conditioner insurance on your homeowners policy.

If you have a central air conditioner, your unit falls under the dwelling coverage of your homeowners insurance. If you have a window unit, your AC would be covered under the personal property section of your policy.

Home insurance policies are divided into different sections of coverage that protect your property and livelihood in different ways. The primary protection for your house is dwelling coverage. It protects the structure of your home and its permanently attached features, and a central AC unit is considered one of these features.

This means damage to your central air conditioner caused by a covered peril would be covered up to your dwelling coverage limit. The coverage differences with a window unit aren’t huge, but you should be aware of them. 

Firstly, your window unit would be covered if it gets stolen. Theft is a covered peril. Also, window units would be covered under your personal property coverage. 

A window unit is covered from all the same perils, but personal property coverage has lower limits than dwelling coverage. It probably wouldn’t be an issue since both sections of your policy should fully reimburse you in case your central or window unit suffers damage, but it’s still something you should know.

In the debate of central AC vs. window AC units, central AC units typically have a leg up and will likely be covered from every peril your homeowners insurance policy protects against. Since central air conditioning units are usually considered a part of your home, they’re covered under the dwelling portion of your policy.

But window air conditioning units can be easily removed, so they may be considered personal property instead of a part of your home’s structure. While you likely have more dwelling coverage than personal property coverage in your policy, your policy should have high enough limits to cover both window and central AC units.

Your homeowners insurance policy typically won’t cover air conditioner leaks because units typically tend to leak due to normal wear and tear or improper installation. If normal wear and tear or age are the culprits of damage, your policy will almost assuredly not cover the damage. But if the unit begins leaking due to improper installation, it may be up to the installer’s insurance to take care of the damages.

However, if your AC began leaking due to a covered peril, such as a vandal taking a baseball bat to the connected pipes or an exploded hot water heater that melts away a part of the AC unit, the chances of your homeowners policy covering it are pretty good.

Your home insurance policy likely outlines some scenarios in which it will cover water damage from an air conditioner. As long as the damage was caused by a covered loss, you should be ok. But, homeowners insurance won’t cover water damage from an air conditioner due to negligence or wear and tear. Also, in some cases, your policy may cover the damage caused, but not the air conditioner itself

As we’ve mentioned, your home insurance policy covers you from over a dozen perils. One of the lesser-known ones relates to the accidental discharge of water. Your policy may state that it protects against “accidental discharge or overflow of water or steam” from “a plumbing, heating, air conditioning or automatic fire protective sprinkler system or from within a household appliance.”

Your policy may also mention that your insurer will pay for tearing out and replacing any part of the building that was damaged if needed to repair the system or appliance that caused the water damage.

This coverage only comes into play, though, when the water damage wasn’t caused by negligence. For instance, if you’ve left your air conditioner’s drain lines clogged for months, your insurer won’t cover water damage caused when the AC starts seeping water.

Yes, your homeowners insurance will cover an air conditioner replacement if the unit was damaged by a covered peril, such as the ones we’ve listed above. But your insurance company won’t replace your air conditioner if the damage was due to wear and tear or another non-covered peril.

Some homeowners insurance companies do offer supplemental coverage or an add-on for equipment breakdowns, but you may be better off buying an extended warranty for coverage. However, extended warranties typically only last for 10 to 15 years, while supplemental insurance may last for the life of the active policy.

Home insurance may cover air conditioner replacement if the damage necessitating a new AC system was caused by a covered peril. If your system breaks down due to expected wear and tear, your provider won’t pay for a new one.

If the damage to your air conditioner was caused by a covered loss like the perils we mentioned earlier, your insurer can pay for a new one. The cost of a new air conditioner will be included in your settlement. 

But, if your AC clunks out because it’s old, or if you’ve never taken care of it in the first place, your insurance won’t pay for a new one. Normal home upkeep isn’t covered in your home insurance policy. Your provider expects you to perform routine maintenance on and around your property to keep it in working order as best as you can. You need to maintain your home to avoid claims.

Don’t confuse your insurance policy with a home warranty. Typical home upkeep isn’t covered. Insurance plans are in place to help when something goes wrong, not when something stops working when it reaches the end of its expected life.

Central air conditioning units generally have a lifespan of around 15 to 20 years. Any AC unit failing around this age on its own would likely be considered a home maintenance issue by your insurer. 

Additionally, your insurance provider won’t cover an AC replacement if your air conditioner stopped working prematurely because you neglected to care for it. If you’ve never performed routine checkups on your air conditioner, you can’t expect it to last as long as it should. And, your insurance won’t cover it since you failed to maintain it. Generally, insurers don’t cover policyholder negligence. 

Be sure to have your AC inspected at least semi-regularly by a professional, especially if you use it often. The receipts or records from these visits could also help you if you end up having an air conditioning insurance claim.

However, you may be able to add an endorsement to your policy – called mechanical breakdown coverage – that allows your provider to cover unexpected electrical or mechanical breakdowns of your home appliances and HVAC systems, including your air conditioner.

Mechanical breakdown coverage can financially safeguard your AC if it stops working due to improper installation, or if it fails after a power surge. It helps with expenses to repair and replace damaged property after a mechanical breakdown, including the air conditioner itself. 

And, in some cases, it can cover some of the costs to upgrade to a more energy-efficient or environmentally friendly appliance.