How to get property insurance without central heat?
SHORT VERSION: It’s almost impossible for me to get property insurance in Texas for houses which do not have central heat. This seems like a real problem for houses that use mini-splits. For those of you with mini splits, what insurance company do you use?
FULL DETAILS: I recently asked my insurance broker to see if she could lower the insurance cost on my home, auto, and rental houses by going with a different insurer. I sent her the specs on the properties and she sent me an app to sign, and I noticed the app listed that each house has Central Heat, even though all houses but one don’t. (They currently use electric space heaters, and not much, since Austin winters are mild. It’s supposed to be 80°F this week, in December.)
I notified my broker and she told me that no insurance company would take on a house that doesn’t have central heat. The original company that we had switched to (Travelers) dropped me like a hot potato once they learned my properties don’t have central heat. I asked if I could replace the window-unit ACs to heat/cool units which use an air-source heat pump, but that wasn’t good enough for them.
The original insurer’s understanding was also that I had Central Heat, so the broker again asked if combo window units would suffice, and, according to the broker, they reluctantly agreed after she talked them into it.
Of course I could easily get insurance if I claimed the houses have central heat, but (1) I’m not about to commit insurance fraud, and (2) if I ever had a fire claim, the insurer could deny the claim based on my misreporting the heat source for the house.
This ordeal made me think that if I ever got a mini-split system (which I’ve been contemplating) I might not be able to insure my home. I Googled around and found that it’s indeed a thing that it can be tough to get insurance without central heat. So, for those of you with mini splits, what insurance company do you use, and are you sure they know that you don’t have central heat?
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To aid the discussion, can you be a bit clearer on what is considered Central Heat by your insurer? Do you mean a fully distributed system? Would baseboard resistant heaters in each room count? I'm having a bit of difficulty understanding how a mini-split sized to keep all the rooms above code mandated temperatures wouldn't count as Central Heat.
For most purposes any heating system that has wall-thermostat type controls would usually qualify, whether baseboard or ductless heat pumps, as long as all of the essential rooms can be kept to at least 68F at the 99% outside design temperature without resorting to auxiliary heat such as space heaters or window-unit heat pumps, or anything requiring active human intervention such as wood stoves.
Basically, if it plugs into the wall or doesn't have automatic room temperature controls some institutions will balk.
Electric baseboards with wall thermostats would work, as would ductless or ducted mini-splits as long as all essential rooms were covered and the capacity requirements were met.
@Malcom, I don't know the insurers' definition. My broker just told me that insurers require "central heat".
@Dana, thanks that makes sense. But before I install a mini-split, I'll double-check that it's acceptable to the insurer.
I looked for a way to get a wall-mounted thermostat for a window unit AC/heater, but there's no off-the-shelf solution, and a jerry-rigged version would likely look sketchier than using the integrated thermostat.
I wonder where these would sit? They have the advantage of being both permanent solutions, but also can be demounted seasonally.
You probably just need something permanently installed with a thermostat as Dana suggested. Maybe an in-wall electric resistance heater would suffice? This is how it’s usually done in small commercial buildings and I’ve never had a problem.
The outdoor wood boiler guys have this issue too. Usually they put in a resistance coil in their indoor air handler, or a secondary boiler fired by a conventional fuel, something the insurance people understand that can operate unattended.
It would be strange that your insurance agent can’t just tell you what they want to see though. If they don’t like what they see, they should be able to tell you why, and what you need to do to “cure” the issue in their insurance jargon. I’d try the wall mounted electric resistance setup since it’s relatively cheap, and easy (no venting, just an electric hookup, etc.). Set it for a low enough temperature that it’s only a backup and your other system does all the regular work.
The insurance company doesn't want your pipes freezing. They also don't want you using space heaters, either electric or kerosene, because those have an unfortunate tendency to burn the house down. They probably don't want you burning wood either, for the same reason.
"It would be strange that your insurance agent can’t just tell you what they want to see though."
She did tell me. She told me "central heat". She might be wrong, but that's what she told me.
"Maybe an in-wall electric resistance heater would suffice?"
Possibly, but that would mean running new electric circuits, which get pricey fast. Also, they wouldn't be nearly as efficient as the heat-pump wall/window units.
Electric lines are generally cheaper than gas and refrigerant lines though. And yes, it WOULD be much less efficient to run the electric resistance heat compared with your mini split, but that’s not what you’re trying to do. The purpose of the electric resistance heat is to satisfy the insurance company, not to heat your home. You’ll be running your minisplit to do the real heating. Just set the resistance heaters thermostat low, like 50*F or so, so that it will only come on if your minisplit fails. This makes it act as a backup to the minisplit.
The electric resistance heater would only be there to make the insurance company happy, and it’s probably the cheapest thing you can install that will. You won’t actually be using it to heat your house.
At work, I typically install small electric resistance heaters in small equipment buildings. The heater is there as a backup, and to keep the insurance people happy, but it never runs — the electronic equipment in the building heats the building so no supplemental heating is needed. We only put in the electric heaters to keep insurance companies and building departments happy (for freeze concerns).
If, as Dana said, a mini split will pass muster with the insurance company, then there's no need to install separate, expensive, useless electric resistance heat panels.
This is a very confusing discussion, because we don't know what options are in play, since the only person who can tell you that is your insurance agent, and you haven't asked them.
To repeat myself yet again, I *did* ask. The answer I got might not be accurate, but it's clear what the agent said.
Then you didn't get an useful answer from the only person who can give it to you, and for some reason don't want to get them to clarify it. So I don't understand how you are able to dismiss suggestions based on their being "expensive and useless".
It's Michael, please.
"...So I don't understand how you are able to dismiss suggestions based on their being 'expensive and useless'.
Yes, it's very clear that you don't understand. I'm sorry my explanations didn't make sense, but that's the best I can do.
For the first 25 years our home's existence on Martha's Vineyard, we did n0t have central heat, or really any heating system beyond a wood stove in the living area, electric space heaters in bathrooms, and a pretty good passive design. Yet we've had, and still have, insurance from USAA. I don't remember filling out forms regarding things like central heat, but I certainly wouldn't have falsified anything.
Hugh, that may be a good way around it...tell them you have a passive heating system....windows.
The only other option I see that you have is to push the issue with your insurance company then. Maybe try involving a different agent, or someone else higher up in the company that can better explain what you need.
In my own opinion as an engineer, a minisplit intended for space conditioning would count as “central heat”. Such a system is a recognized (not something you cobbled together in your garage), approved (it will carry certification marks from recognized testing labs like UL and/or CSA, etc), automated (you don’t have to constantly tend the unit like you do a wood stove, for example) device with a history (you’re not the only one using minisplits for this purpose) of successfully heating homes. That’s usually the stuff the insurance company cares about.
My guess is your agent doesn’t understand what you have, and doesn’t know what a minisplit is since they’re far less common than “central” forced air or radiant heating systems. Since I’ve had to deal with this same issue before at work, I know the reasons behind the insurance company requirements and they are pretty much all about protecting the structure from freezing, and continuing to do that if you’re away. Any system that can do that should pass muster with the insurance people.
I only suggested electric resistance heat as something I’ve used in the past to assess this exact issue, and as something the insurance people are likely to be familiar with.
When we moved into our new house four years ago, we had to switch insurers because our previous carrier refused to insure our house heated with minisplits.
We ended up with Hanover which has been fine.