Repair vs Replacement: Insurance Coverage Differences in Brisbane
Installer’s guide to how Brisbane home insurance treats AC repair vs full replacement — what insurers will cover, what they won’t, and how to present your claim to maximise the right payout.
Quick answer: Insurers pay for repair when the damage is to a single component (PCB, capacitor, coil) and replacement when the whole unit is destroyed (storm, fire, total water immersion). End-of-life units get depreciated-value payouts. Reports from $290 typical 3-day turnaround.
When insurers pay for repair
- Single-component damage from an insurable event (lightning-struck PCB, hail-dented outdoor coil, impact-damaged fan motor)
- Unit otherwise in good condition — under 8 years, documented service history
- Repair cost lower than depreciated unit value
Repair payouts typically cover parts + labour + technician callout. Sometimes also temporary cooling rental during the wait for parts.
When insurers pay for full replacement
- Whole unit destroyed — tree fall on outdoor, fire damage, total water immersion
- Multiple major components damaged — repair cost approaches new-system price
- Refrigerant contaminated beyond economic recovery
- Existing unit at end-of-life AND damage triggers replacement (then they pay depreciated value)
Replacement payouts cover new unit + install + old unit removal + disposal. Usually subject to depreciation on units over 5 years old.
Depreciation on older units
Insurers typically apply straight-line depreciation on AC units over the unit’s expected service life (12 years for most major brands):
| Unit age | Typical insurance payout |
|---|---|
| 0–3 years | 100% of replacement |
| 4–6 years | 70–85% of replacement |
| 7–9 years | 40–60% |
| 10–12 years | 20–35% |
Some policies have “new for old” clauses that override depreciation — check your PDS.
How to present your claim
The technician report is the document that gets your claim approved or rejected. The right report:
- Identifies the specific insurable event (lightning, hail, impact, flood) and links damage to it
- Documents install date, last service, model + serial
- Recommends scope (repair or replacement) with reasoning
- Includes itemised repair or replacement quote
- Photos of damage and surrounding context
Reports from $290 (residential), $480 (commercial). 3 working day turnaround. See insurance AC reports.
Common questions
Does insurance cover AC repair or replacement?
Both, depending on scope of damage. Single-component damage = repair. Whole-unit destruction = replacement (subject to depreciation on older units).
How is depreciation calculated on AC insurance claims?
Typically straight-line over 12 years. Unit at 6 years gets ~60–70% of replacement value. Unit at 10 years gets ~20–35%. Some policies have “new for old” overrides — check PDS.
What’s the difference between repair vs replacement payouts?
Repair pays for parts + labour + technician callout. Replacement pays for new unit + install + old unit removal + disposal, less depreciation on older units.
Can I push for replacement when insurer suggests repair?
Yes — if the report shows repair isn’t viable (parts unavailable, unit at end-of-life, multiple cascade failures imminent). Need supporting evidence.
How much does an insurance report cost?
From $290 residential, $480 commercial. Reimbursed by many policies when claim is approved.
Will the insurer accept your installer’s report?
Yes — insurance-formatted technician reports from ARC-licensed installers are standard evidence. Insurers prefer them over generic quotes.
AH Air Conditioning · 63 Britannia Ave, Morningside QLD 4170 · ARCtick licensed · 20+ years across Brisbane.