AC Insurance vs. AC Home Warranty Coverage

Learn the difference between having insurance for your AC unit and the coverage you get under a home warranty.

Outdoor AC Unit

A/C not cooling? Having problems with your ductwork? A/C repair can be expensive. The average cost of an A/C repair is between $164 and $559, with the average homeowner paying about $360 to fix a broken unit. And what if the technician determines that your A/C unit can’t be fixed and needs to be completely replaced? You’d better have deep pockets, because the average cost of an A/C replacement is $5,602, with costs ranging between $3,779 and $7,429.

Those are some hefty price tags, especially knowing that your A/C will have to be replaced eventually. Will your homeowners insurance cover the cost? Probably not. Homeowners insurance only covers A/C repair or replacement when your unit has been damaged by a natural disaster, fire, flood (if you have flood insurance) or other covered calamity. It doesn’t cover breakdowns due to normal wear and tear or common HVAC problems — but a home warranty from American Home Shield® does.

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Homeowners Insurance and Your A/C

To understand why homeowners insurance won’t cover the cost of repairing or replacing your A/C due to normal wear and tear, you need to understand the difference between homeowners insurance and home warranty coverage.

Homeowners insurance protects your home’s structural elements and contents against damage and loss from things that might happen — for example, a fire, a storm, a tree falling or a burglary. Your homeowners insurance policy will cover damage to or loss of structural components of your home and covered contents that suffer specific perils laid out in the policy. However, you might need to add on riders to protect your home and its contents from floods, hurricanes, earthquakes, mine subsidence and other dangers not covered by your main policy. For more information about the differences, see our Home Insurance vs Home Warranty blog post. 

Some insurance companies do allow homeowners to add major appliance repair insurance riders to their homeowners policies. But not all providers offer this option, and even if yours does, the policy might have high monthly costs, high deductibles, low coverage limits and requirements that could be difficult, if not impossible, to meet. 

For example, you might have to provide detailed service logs that prove you’ve maintained your air conditioner meticulously since it was installed. But what if your air conditioner came with the house and you don’t know who did what to it or how often before you owned it? What if you haven’t been the best at taking care of your air conditioner? You might have spent all that A/C insurance money for nothing. And that’s not even considering if your homeowners insurance will help you find a contractor to fix your unit, or whether your premiums go up every time you use the coverage.

A/C Coverage with a Home Warranty from American Home Shield

While homeowners insurance provides coverage against catastrophes that might (but probably won’t) happen, home warranties offer coverage for the everyday appliance breakdowns and home systems failures that definitely will happen, and with a lot more regularity than house fires and falling trees. 

Most home warranties cover A/C failures due to normal wear and tear, which your homeowners insurance won’t cover. And when you choose home warranty coverage from American Home Shield,  you won’t have to worry about showing maintenance records or keeping them in order to qualify for service. You don’t need a home inspection before you can join, either, and it doesn’t matter how old your A/C unit is. Once you’re past the 30-day waiting period for new members, you can request service for your broken A/C.

In addition to covering some or all of the cost of repairing or replacing your A/C unit when it breaks down, a home warranty has other benefits. Unlike a major appliance repair insurance rider, home warranties from American Home Shield cover much more than just your major appliances. You can choose from the Appliance Plan, which covers up to 10 major home appliances; the Systems Plan, which covers up to 11 home systems, like A/C, electrical, and ceiling fans; or the Combo Plan, which covers both, protecting 21 home systems and appliances. 

You choose your payment tier when you buy your plan, and your monthly payment never goes up just because you used your plan. When you need your A/C or another covered home system or appliance repaired, call or request service online, 24 hours a day, and we’ll send a local technician from our nationwide network to diagnose your problem. Once we have the diagnosis, we’ll make the best decision for you regarding repair or replacement of your appliance. If you have a minor A/C problem, like a failing A/C contactor, we’ll schedule a repair and cover some or all of the cost. If you need a whole new A/C unit, we’ll take care of that installation, too, and defray your A/C replacement costs up to your plan limits.

You need homeowners insurance, but it won’t cover the cost of A/C repair if your unit breaks down due to normal wear and tear. That’s what home warranties are for. Cover all your bases with a home warranty from American Home Shield and keep your cool, even when your A/C isn’t.

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AHS assumes no responsibility, and specifically disclaims all liability, for your use of any and all information contained herein.

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