Home insurance does cover AC units if they are damaged by covered policy perils like theft, fire and some weather-related incidents. For broader financial protection for your air conditioning (AC) unit or heating, ventilation and air conditioning (HVAC) system, you may want to consider a home warranty or equipment breakdown coverage. If you have an HVAC system, it will likely be covered under your Coverage A dwelling insurance. A separate unit, however, will likely fall under Coverage C personal property.
When does homeowners insurance cover AC?
Your HVAC system may be covered under the dwelling coverage or personal property coverage portion of your homeowners policy if the damage or loss results from a covered peril, depending on your policy and limits. In the following circumstances, you may be reimbursed by your homeowners insurance company for repairs or replacement of your AC:
Some weather-related damage
Your AC unit may be covered up to your policy limits if it’s damaged by hail, high winds or lightning. This may include if a tree falls on your AC unit. However, some perils like flood and earthquake damage are typically excluded from homeowners policies. If your AC experiences damage from an excluded peril, you are unlikely to be reimbursed.
Some insurance companies offer coverage for earthquakes and floods, which could also include a separate policy. If you are interested in this coverage, you may want to contact your insurance agent or company.
Fire and water damage
If there is a fire in your home or a pipe bursts suddenly and your AC needs to be repaired or replaced as a result, the damage may be covered by your homeowners insurance policy. If water damage results from flooding or sewer backup as a cause of loss, your unit may not be covered as these are usually excluded from standard home insurance policies.
Theft and vandalism
Although a less likely cause of damage, if your AC unit is damaged as a result of vandalism or theft, the damage or loss may be covered. Theft or vandalism typically requires filing a police report before you can submit an insurance claim.
HVAC system and AC units
Individual air conditioning units are usually considered a part of a homeowner’s personal property, while a larger HVAC system is considered part of the dwelling. With an HO-3 home insurance policy (the most common one), an HVAC system would be covered on an open-peril basis. A smaller window unit would be protected on a named-peril basis under the same policy. This means that an HVAC system would be covered for every kind of loss except what is excluded from your policy, while a window unit would be covered only if the cause of loss is specifically listed in your policy.
When does homeowners insurance not cover AC?
Most modern air conditioners are built to last upwards of 15 to 20 years, but as with all regularly used home items, they will eventually break down. Since homeowners insurance is designed to cover unexpected perils, it is not intended to help if your window unit or AC system needs to be repaired due to general wear and tear. A home warranty, however, may serve this purpose.
Home warranties may be a valuable supplement to a homeowners insurance policy by providing financial compensation for items that deteriorate over time. Home warranty claims are typically only denied because of owner neglect, improper servicing or installation — or because the damage is covered by a homeowners insurance policy. A home warranty will not typically cover unexpected events like lightning. But if a component or even your entire unit needs to be repaired or replaced due to wear and tear, home warranties are designed to cover the expense.
Note that a home warranty is not likely to cover accidental or intentional damage to your AC unit or damage from improperly maintaining the system. For example, if it is determined that you never changed your air filter, a home warranty is not likely to cover the breakdown of your AC. Further, some home warranties won’t cover standalone units unless you opt to purchase appliance coverage separately.
With home insurance, coverage exclusions typically apply in the opposite sense. Repairs resulting from circumstances other than routine use are commonly excluded from warranties but may be covered by homeowners policies. And repairs from wear and tear are generally excluded from homeowners policies but are specifically covered by home warranties (in many cases).
| Fire | Yes | No |
| Internal Water Damage | Sometimes | No |
| Lightning | Yes | No |
| Flood Damage | No* | No |
| Earthquake Damage | No* | No |
| War or Nuclear Hazard | No | No |
| Theft or Vandalism | Yes | No |
| Wear and Tear | No | Yes |
| Neglect | No | No |
*If you purchase coverage for earthquakes or floods, you may have coverage under that policy or endorsement. Without this extra coverage in place prior to the breakdown of your AC unit, you will not have coverage under your homeowners insurance policy.
Do you need equipment breakdown coverage to cover your AC unit?
For added protection, you may want to purchase an equipment breakdown endorsement. This optional add-on can help with the costs of unexpected mechanical failures like a busted circuit breaker or motor. With an equipment breakdown endorsement, you won’t just be covered for your AC unit or HVAC system. This policy endorsement may also be able to help with your dishwasher, refrigerator, stove, backup generator and washer and dryer if they suffer mechanical breakdowns.
Equipment breakdown coverage vs. home warranty
An equipment breakdown endorsement is a form of insurance, while a home warranty is a service contract. A home warranty can help with the repair costs associated with regular maintenance and wear and tear. Equipment breakdown coverage, on the other hand, won’t cover breakdowns caused by neglect, rust, mold and poor owner maintenance. That said, a home warranty typically costs more than an equipment breakdown endorsement.
Additional coverage types for AC units
While coverage for your AC system under your homeowners insurance policy will vary, there are other forms of coverage available that you can add to build a more robust policy. Beyond equipment breakdown coverage, homeowners may want to consider:
- Flood insurance: Standard insurance policies do not cover flood damage, but adding a flood endorsement or standalone policy provides financial protection for your home, including your AC system, if it is damaged during a flooding event such as a storm surge, snowmelt or heavy rainfall.
- Earthquake insurance: Like flood insurance, earthquake damage is not covered by standard home policies. Many carriers offer earthquake insurance as an endorsement. In earthquake-prone regions, you may need a standalone policy.
- Water backup coverage: Damage caused by standing water and sewage backup can cause significant trouble, but this peril is not included in standard policies. This endorsement provides additional coverage in case of a backup.
While these are some of the most common endorsements for AC system coverage, add-ons will vary by carrier. Speaking with your insurance agent may help you determine how to best financially protect your AC unit.
How to file a homeowners insurance claim for your AC
The fine print of your homeowners insurance policy will likely list the coverage types that may apply to your AC system. If there is any part of the policy that you do not understand, reach out to your insurance agent or company for clarification. Your insurance carrier can also help you make an informed decision on coverage types and policy limits and explain what may be excluded from coverage.
If you experience damage to your AC and have confirmed it is covered under your homeowners insurance policy, here are a few tips that may be helpful to keep in mind when you file a claim:
- Take pictures of visible damage.
- Get a copy of the police report, if applicable to the cause of loss.
- Write down your unit’s model and serial number.
- Call your homeowners insurance provider or file a claim online.
- Meet with the insurance adjuster.
- Keep your receipts for the necessary repairs.
- Submit receipts to your homeowners insurance provider for reimbursement.
Each insurance provider is different. Depending on yours, you may need to submit additional documents or take extra steps to file a claim. To verify what’s required, it may be best to speak with an agent.
Frequently asked questions
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Your homeowners insurance may cover AC unit leaks that cause water damage. Typically, homeowners insurance will not cover the cause of the leak but will pay for the damage the leak causes. For example, if a pipe bursts and causes water damage, the damage is often covered, but the pipe replacement will not be covered.
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The cost to replace an outside AC unit can vary widely depending on your location, the brand and the size. Expect to pay between $4,350 and $12,000 to replace an outside AC unit, which includes permit fees and labor. Just like shopping around may help you find the best rate for the homeowners insurance coverage you need, shopping around for service work may also help you save when you need system repairs and replacements.
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Some home insurance companies offer endorsements for additional home appliance coverage. Also called equipment breakdown coverage, these endorsements may extend coverage for your AC system to cover mechanical or electrical breakdown. Alternatively, you could consider a home warranty. Speaking with a licensed insurance agent may help you decide what the best course of action is for adding coverage for your AC system.
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Both an HVAC system and an individual AC unit can be covered by homeowners insurance — but in different ways. Central AC is usually a part of your dwelling coverage (Coverage A), while a window unit is considered your personal property (Coverage C). Under an HO-3 policy, your central air conditioning system would be covered on an open-peril basis, while a window unit would be covered only for named perils. Importantly, regular wear and tear of either type of AC won’t be covered by a home insurance policy.
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