My Air Conditioner Died and My Homeowners Policy Wouldn't Pay a Dime. Here's Why

I wasn't happy with the large bill, either.

During the summer of 2021, my downstairs air conditioner died during the hottest week of the year. And it cost many thousands of dollars to replace it with a new unit.

In the summer of 2022, the same thing happened to my upstairs air conditioner. Only by then, inflation had taken hold, so the cost of replacing it was even more expensive than it would've been a year prior.

These events made me gloriously unhappy. And the worst part? My homeowners insurance policy didn't cover the cost of either issue. 

To be fair, though, I wasn't expecting my homeowners policy to pick up the tab. That's because wear and tear is usually not an expense these policies will cover.

Know the rules of homeowners insurance

One main purpose of homeowners insurance is to cover you in the event of property damage. If a storm rolls in and takes out your roof, that sort of event might mean having your policy cover the cost of a replacement roof. But if your roof starts to naturally degrade over time, your homeowners insurance generally will not cover the cost of a replacement. That's because in this case, it's not that your roof has sustained damage -- it's that roofs don't last forever.

Such was the case with my air conditioners. They didn't give out on me as a result of damage to my home or a weather event. They gave out on me because these units are only designed to last about a decade or so before they start to deteriorate. (It would be nice if they lasted longer, but so it goes.) And so not surprisingly, my homeowners insurance company wouldn't pay. In fact, I didn't even bother to file a claim because I knew the work at hand wouldn't be covered. 

Have emergency savings, just in case

When you own a home, it's important to recognize that a lot of things can go wrong that your homeowners insurance policy will not pay for. That's why it's super important to have a solid level of savings -- ideally, enough to cover at least three months of essential bills plus a little extra in case something major in your home breaks.

In my situation, I thankfully had enough money in my savings account to cover the cost of both air conditioner replacements. And while I wasn't happy about taking large withdrawals two years in a row, at least it prevented me from landing in debt.

But many people don't have funds earmarked for emergency expenses. A recent SecureSave survey found that 67% of Americans don't have enough money to cover an unplanned $400 expense. And trust me when I say that replacing an air conditioner costs a heck of a lot more than that.

Of course, not every home repair will cost thousands of dollars. Some might cost just a few hundred. But either way, it's important to be prepared financially for those situations. And it's also important to understand what your homeowners policy will and will not cover, so there's no confusion on your part.