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Essential for Adjusters: HVAC — When to Repair or Replace?

October 17, 2017HVAC

It’s that time of year again— temperatures are starting to drop, which means furnaces will be turned on to help heat things up. Although, HVAC systems are designed to make a workspace or home comfortable, sometimes things go wrong.

Aging, lack of maintenance, poor installations and pure bad luck contribute to potentially dangerous malfunctions. When that happens, as adjusters, you want to make sure you’re properly equipped to effectively evaluate the property claim.

On average, heating equipment generates relatively few claims. In commercial settings, a building’s heating system — furnace, boiler or heat pump — can last for many years with proper maintenance, only requiring updating on an “as-needed” basis, such as when components fail due to age, inadequate maintenance, or when the discovery of material weaknesses or failures during inspections warrants repairs and replacements.

On the other hand, damaged or poorly-maintained units typically have a shorter equipment life – and higher costs – due to excess wear and tear caused by overwork and overheating.

As insurance professionals, when faced with evaluating the cost to repair or replace an HVAC system, it’s key to have an arsenal of prepared questions on-hand to get the right information the first time:

• What type of heating system is used in each part of the building? Wall heaters, floor heaters? Or forced hot air, steam or other?
• What type of fuel is used in the heating system? Natural gas, propane, electric, oil?
• When was the heating system or furnace installed? What is its condition? Has it been installed and vented, if appropriate, according to the manufacturer’s specifications?
• Has the heating system been updated in any part of the building? When was this done? Describe what updates were made and note whether the updates were full or partial.
• Have there been any previous problems or failures of the heating system? If so, describe the problem and how it was addressed.
• How is maintenance of the heating system handled?
• When was the boiler installed? What is its condition? Was it been installed and vented, if appropriate, according to the manufacturer’s specifications?
• What type of fuel is used in the boiler? Natural gas, propane, electric, oil?
• How is maintenance of the boiler system handled?
• Is there a warranty currently in place? What does the warranty cover?

HVAC claims can be tricky for adjusters to handle due to their technical nature. The more complete information you can gather during an inspection, the easier it will be to determine if a repair is sufficient or a complete replacement is needed.

You can learn tips like this and more at the Essentials for Adjusters HVAC course, Nov. 2 – 3, 2017.

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