Damage to Air Conditioner Caused by Power Surge

October 11, 2010

We have a coverage question under our HO3 policy. The insured's AC unit condenser was damaged due to a power surge. The contractor found blown fuses and arced wires. The technician says because of a power problem it shorted out the compressor. The insured's AC repair technician stated that the power problem that damaged the insured's AC condenser unit was caused by the power company as there has been many brown outs and rolling black outs in the area of the insured residence.

 

We were wondering if there is coverage as the policy excludes power failure (off the insured residence), although this is more of a power “surge”.

New Jersey Subscriber

What you have is an ensuing loss. The power surge/brownout caused the arcing and shorting to the a/c compressor. The exclusion has an exception for loss from a peril insured against which is covered. There is no exclusion for arcing and shorting of wires, so the damage is covered. The exclusion would apply if after the brownout/power surge the equipment simply failed to work without any damage to its parts.

 

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