We have a building with the AC units on the roof (14 of them). We are working on an insurance claim related to a hail storm that damaged the roof and the AC units.
Our HVAC guy bid to replace the units with new R-410A units, which will require replacing the coils and lines also. Price tag, about $35k
The insurance company's inspector put in his estimate to replace the damaged units with R-22 units. Price tag, about $16k
I did a little looking and found that R-22 has been outlawed for new installations, however, there is this loop hole for "dry charge" units. Everything online seems to recommend not replacing with R-22 units because parts availability and the availability of the refrigerant will only get worse. The 20 grand difference in cost is what's driving the insurance company's position.
Anyone have experience with this question relative to an insurance claim? The smart thing to do is replace with R-410A units. Am I likely to get anywhere by pushing back on the insurance company based on R-22 being outlawed for new installations?
Thanks in advance for your collective wisdom.
Depending on the policy, Insurance will replace with 'like kind and quality', not new units.
Thanks Eddie. The question isn't so much around new vs. used, but rather the legality of R-22.
Any other thoughts?
I think you can use R427A as a direct replacement in R22 units. R22 will be gone in 2020 so you could fill 'em up now and worry about it when they need more work.
Check with your agent or broker on you "ordinance and law" coverage. That may pay for the upgrade to the new legal units. Of course you have to have the coverage to be covered.
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Thanks for the input, everyone. I'm guessing because of the substantial price difference and the allowed loop hole, we'll probably have to replace with R-22 units.
Something you may want to consider...
Regulation has driven the price of R-22 into orbit. Replacement parts on older units tend to be rather more expensive. The cost to maintain them is also higher due to EPA regulations around refrigerant handling (licensing, recovery/recycling, etc.)
The maintenance costs of these units, therefore, may be higher in the long run than shelling out now to replace them with newer technology systems. There will also be profit consequences if you later try to sell the building without having made the updates.
When ever I see someone trying to justify lower short term costs versus higher long term costs, I always have to ask the same question: How much money can you AFFORD to "save"?
I love asking that in person. Some of the facial expressions I get are truly priceless!
IMO, always do the upgrade. It improves the value of the property, gives better service, and you have the opportunity to write it off as Damage Repairs.
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