Insurance Fraud and the HVAC Industry in Charlotte
It’s not too often that you find national news related to the HVAC industry popping up here in the Charlotte NC area. After all, the worse that usually makes the local news is related to air conditioner theft for the value of the scrap copper inside. That changed this week with a press release we spotted about the rising problem of Insurance fraud, as it relates to your home HVAC system.
According to the article, homeowners in the Charlotte area are at risk of being taken advantage of by heating and air conditioning repair companies they may trust, and most of the time, they just go along with the recommendation, not knowing any better.
I know several contractors and technicians in this area personally, and after reading the article, I was surprised by such a blanket statement being made in the press release… as it paints a picture of distrust and guilt across the industry, and claims that it happens on a daily basis!
From the article:
“It’s been our experience that there are many honest HVAC companies out there,” states Damon Stafford of HVAC Investigators of Charlotte, NC. “However, the blatant dishonesty and fraud that we encounter on a daily basis is disheartening. We see full replacement claims submitted to insurance companies where a breaker is simply tripped, or where the wiring leading to an HVAC compressor was accidentally cut by a previous repairman.”
After a bit of deeper digging on our end, we found another article that stated:
“Our research found that the average claim submitted to insurance companies was the result of an (owner) being told by an HVAC company that their unit was in need of a full replacement, when in actuality, a minor repair would bring the system back to pre-loss condition,” says Damon Stafford of HVAC Investigators. “It becomes a self-fulfilling prophecy … (owners) experience an issue, contact a local HVAC contractor, and in turn unknowingly file a fraudulent claim. That’s in essence how the game has worked for the past 30 years.“
We have put out a feeler request to several local companies asking their opinion on this. We will update as we receive feedback.
Situations When Insurance Claims Might Be Filed
Obviously, there are times when a local HVAC technician may recommend that you file a claim with your homeowners insurance company. These include:
- After a Lightning or Thunderstorm Event
- Yard or Home Flooding
- Hail Storms where the Unit May be Damaged
- System Theft or Vandalism
- Trees or Branches Falling onto the Unit
Along with the more obvious reasons above, there are likely several others we didn’t think of. We hope that if you have had a recent insurance claim that involved your home HVAC system, you share the reason with everyone below.
The Role of HVAC Investigators
From what we can tell, HVAC Investigators, a nationwide network of service technicians based in Charlotte, is putting itself in the middle of the insurance claim process. Working as an intermediary between the insurance companies, homeowners and HVAC contractors, while leaning toward protecting the insurance companies first.
From their website:
HVACi is like insurance for insurance companies…we protect your organization from fraudulent claims to help you settle faster, without impacting the customer experience.
HVACi is committed to providing accurate, timely, and fact based reports. Our 8 page assessments furnish detailed summaries of what was the damaged, how it was damaged, and whether or not the equipment can be repaired…and at what cost.
Its clear to see that HVACi is in the business of preventing fraud against the insurance companies. The next questions that arise are surrounding the impact on homeowners who can easily become confused during the process of a repair or replacement claim. After all, when your lifetime trusted heating and air guy tells you that in their professional opinion, the entire unit needs to be replaced, then your insurance company sends out a representative of their own who comes back and says they will only pay for a circuit board… where does that leave the homeowner?
The Challenge for Contractors in Charlotte
Lets assume for the sake of this example that lightning strikes your home HVAC system in a bad storm. the first thing you usually do is call out your trusted HVAC repair company in Charlotte to diagnose the system and help you get it fixed. During the inspection, the technician discovers that the main circuit breaker, electrical wiring, the main circuit board on the unit itself and possibly several other components, inside and outside, are inoperable due to the lightning strike.
The challenge for Charlotte HVAC contractors is that until each of these items is replaced individually, they have very few ways to tell what other parts may have been damaged along the way. After all, how can anyone know if the compressor was damaged, when the unit wont run until the other parts are replaced? In addition, what if the parts are replaced under an insurance claim, and 30 days later, the compressor fails? Was it due to the lightning strike? Who is responsible for the repair now?
Have You Filed or Been Denied An HVAC Insurance Claim?
What happened in your situation? Please share your own personal experiences below. We’re interested to hear about how all sides of the equation handled the claim.