Heat pumps and air conditioners are currently spreading more rapidly than any other item of residential building services, and from an insurance point of view they are just as much a borderline case as solar panels: an installation lasting a day or two, valuable equipment out in the open, and a commissioning process on which the manufacturer's warranty also depends. As a broker, I see the question come to a head when there is a claim: with an outdoor unit stolen a week after installation, a compressor ruined by a refrigerant leak or water damage caused by a badly routed condensate drain, the owner points to the installer and the installer points to the home insurance. This article looks at where the boundary between the two policies lies, and what is worth clarifying in advance on both sides.
- During installation, physical damage to the equipment is, on the installer's side, a matter for erection all risks (EAR) insurance or an annual framework policy, while damage caused to third parties falls under liability insurance – general liability insurance typically excludes damage to the equipment being installed.
- The dividing line is commissioning and handover: from then on, the equipment falls under the owner's home insurance, whose basic cover treats the outdoor unit differently from insurer to insurer – which is why several insurers offer a separate air conditioning and heat pump add-on, typically for theft, storm, hail and power surges.
- The consequences of faulty commissioning remain the installer's responsibility even after handover – putting right one's own work is a warranty matter, not an insurance claim; the owner's tasks are the commissioning record, the invoice and reporting the increase in value to the insurer.
During installation: the installer's side
Until the equipment has been handed over, the risk lies on the installer's side. For physical damage to the items being installed – the outdoor and indoor units, the refrigerant pipework, the buffer tank – during installation and the trial run, the appropriate cover is erection insurance, i.e. erection all risks (EAR); the article on mechanical installation work gives a detailed picture of this. For residential jobs a project-specific EAR policy is rarely taken out; installation companies typically work with an annual framework policy or an additional clause to their liability insurance – if they have such cover at all. The key issue is one of the classic exclusions of general liability insurance: Hungarian policy conditions typically do not pay for damage to an item that the insured has installed, handled or worked on. In other words, if the installer drops the outdoor unit while lifting it into place, that is not a liability loss but damage to the object of their own work – this needs either erection insurance or a separate clause, and this differs from insurer to insurer.
Damage caused to third parties – a unit falling onto the neighbour's car, water leaking into the flat below because a water pipe was drilled through – is the territory of liability insurance. If the installation company is listed in the chamber register as a building contractor, since 15 January 2025 it has been required to hold compulsory liability insurance under Section 21/B of Government Decree 191/2009 (IX. 15.); I wrote about this in the article on compulsory contractors' liability insurance. Under Government Decree 14/2015 on fluorinated greenhouse gases, work on the refrigerant circuit may be carried out only by a certified person and a registered company – in the event of a claim, a lack of certification also sharpens the questions of liability and cover.
The dividing line: commissioning, trial run, handover
In Hungarian policy conditions that follow the international model, cover under erection insurance typically ends when the equipment is handed over or put into operation – whichever happens first – and the conditions usually also set a time limit for the trial run. For a heat pump, this point is commissioning: according to distributors' descriptions, it includes setting up the system for heating, cooling and hot water, coordinating it with the thermostats, the trial run and the commissioning record, which is a condition for claiming under the manufacturer's warranty – ‘the heat pump's warranty can only take effect with professional commissioning’. The record is therefore not a formality: it is the document that separates the installer's risk from the owner's. Under the rules of the Hungarian Civil Code (Ptk.) on contracts for work, the risk of loss passes to the client, as a general rule, on handover and acceptance of the work; if the owner bought the equipment themselves and it is already standing on their property but has not yet been installed, theft or damage before installation is the grey zone – their home insurance often excludes or limits contents kept outdoors, and the installer has not yet taken it over. This is worth setting down in the installation contract.
After handover: the owner's home insurance
From handover, the equipment enters the world of home insurance, and the first question here is whether the policy even knows about it. In Hungarian policy conditions, a built-in air conditioner or heat pump typically counts as an accessory of the building or as building services equipment, not as contents – but whether an outdoor unit on the façade or in the garden counts towards the building's sum insured, and for which risks, differs from insurer to insurer. The typical gap: storm and hail hit the outdoor unit most easily, theft targets a unit that can be reached even from outside the fence, and the inductive effect of lightning and mains power surges hit the electronics – and several of these are either not included in the basic cover or are subject to a limit. That is why several insurers offer a separate air conditioning and heat pump add-on, typically for theft, storm, hail and power surges, and under some conditions also for vandalism or breakdown of the equipment, with its own limit and deductible; distributors' information materials also recommend this, and recommend that before taking out cover the reader check exactly which losses the insurer pays for. The same logic applies to solar panels, as I described in the article on solar panel installation.
The other task is notification. A heat pump system substantially increases the value of the building: if the sum insured does not keep pace, underinsurance can lead to proportional payment in the event of a claim. The insurance chapter of the Hungarian Civil Code (Ptk.) also makes it the policyholder's obligation to report changes in material circumstances – a heat pump is typically not a significant increase in risk, but failing to report it may count against the owner in the event of a claim if the equipment played a part in the loss. Reporting is the owner's own, non-transferable task; if you let me know, I prepare the comparison of the add-ons.
Faulty commissioning: whose loss is it?
Commissioning guides list the typical consequences of faulty commissioning: high energy consumption, noisy operation, refrigerant leaks, a shortfall in heating output, premature breakdown and loss of the warranty. Most of these are not an insurance claim on either side. The owner's home insurance pays for sudden, external events – storm, theft, power surges –, while a breakdown resulting from faulty installation is typically excluded; at most, a machinery breakdown or equipment failure add-on may give partial cover for it, on conditions that differ from insurer to insurer. The installer's liability insurance covers damage caused to third parties, while putting right one's own work is a matter of warranty and statutory liability for defects (szavatosság): under the Hungarian Civil Code (Ptk.) rules on defective performance, the installer is liable for installation defects, and for defects in the equipment – if it was bought by a consumer and the product falls within the categories subject to mandatory warranty listed in a separate decree – the selling business is liable under the mandatory warranty of Government Decree 151/2003, which depends on value thresholds. Under the decree, the mandatory warranty period starts when the equipment is handed over, but if commissioning is carried out by the seller or its agent, it starts on the day of commissioning – another argument in favour of the commissioning record. What liability insurance typically does pay for is the consequential damage of faulty commissioning: other equipment, not installed by the installer, ruined by the leaking refrigerant, a neighbour's flat damaged by condensate water, a passer-by injured by a falling unit. The boundary between the defective part and the consequential damage is the same here as on large projects; a separate answer on the FAQ page deals with machinery breakdown during the trial run.
What should the owner do, and what should the installer do?
As an owner, check your home insurance before installation: whether the outdoor unit is insured as part of the building, for which risks, and whether there is an air conditioning and heat pump add-on – and ask the installer for proof of their liability insurance. At handover, insist on the commissioning record and the invoice – the insurer asks for these in the event of a claim, and the manufacturer for a warranty claim – and then report the increase in value. As an installer, check the exclusion in your own policy relating to items being installed; if there is no clause or erection insurance for it, damage to the equipment from lifting it into place until handover is borne by the company. The article on renovation from the owner's point of view sets out the general framework for work at home; this article covers the building services boundary. In the event of a claim, the primary route for reporting it on both sides is the insurer's claims line; if a case gets stuck or is disputed, I help where I can.
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Sources
- Klimadirekt – Heat pump commissioning (steps of commissioning, record, warranty)
- Klímatechnika webshop – Home insurance for air conditioners and heat pumps (distributor's information)
- Government Decree 191/2009 (IX. 15.) on construction activities (Section 21/B compulsory contractors' liability insurance)
- Government Decree 14/2015 on the conditions for activities involving fluorinated greenhouse gases (certification, registration)
- Government Decree 151/2003 (IX. 22.) on the mandatory warranty for certain durable consumer goods
- Hungarian Civil Code (Ptk., Act V of 2013) – contract for work, defective performance, insurance contract (notification of changes)
