Building Damage Assessments: HVAC&R Systems and Components

J.S. Held’s Inaugural Global Risk Report Examines Potential Business Risks & Opportunities in 2024

Read More close Created with Sketch.


Heating, ventilating, air-conditioning and refrigeration (HVAC&R) equipment is often included in building damage loss claims or forensic building assessments, especially those system components that are installed outdoors. If you write or review large estimates, this paper will explain the most common HVAC&R systems and how their components work. It will also cover how these systems can fail or allow water intrusion to a structure.

HVAC System Functions

In today’s world, we take heating, air conditioning, and ventilation for granted. We walk into warm homes and offices in winter and cooler and less humid homes and offices in summer with little thought of the equipment regulating our indoor environments. Did you know that air conditioning was first used in 1902 at New York’s Sackett & Wilhelms Lithographing and Printing Company? [1] The printer published a four-color edition that required four separate runs. The air conditioning system was installed to keep the humidity level even between printing runs. It was not installed to comfort the workers in their sweltering environment. In 1906, Carrier first began installing air conditioning for comfort applications.

While many of the functions performed by HVAC systems are apparent from the acronym, some are not. Air-conditioning is most often associated with cooling air, but also includes dehumidification as a byproduct of cooling the air. Heating is required in colder climates to offset heat loss through the building envelope and maintain adequate indoor temperatures for occupancy. Ventilation is the process of introducing fresh outdoor air into a building to dilute indoor air pollutants generated by people and building materials (off-gassing). This often includes exhausting air from spaces like bathrooms and kitchens with heavy pollutant sources. HVAC systems almost always include a means of filtering or cleaning the air they circulate, and sometimes include a humidifier.

Common to most HVAC systems is the refrigeration cycle, which uses chemical refrigerant in a closed system to cause heat to move from a “cold” area to a “warm” area. This is counter to the way heat moves naturally, from warm to cold.

The four basic components of a refrigeration system work as follows:

  • In the compressor, the warm refrigerant gas is compressed to a high pressure and temperature.
  • In the condenser, the hot gas is cooled enough to cause it to condense to a warm liquid. The heat is rejected to the “warm” area, usually outdoors.
  • The expansion valve allows the warm liquid to pass to an area of much lower pressure. When the pressure reduces, some of the liquid flashes (evaporates) to a gas and cools the remaining liquid.
  • In the evaporator, the rest of the liquid refrigerant evaporates to a gas, absorbing heat from the “cold” area.

Both the condenser and evaporator usually incorporate a blower to move air through the coils. The evaporator will be mounted above a drain pan positioned to collect any moisture (water vapor) that may condense out of the cooled air. Note that some systems may also incorporate a reversing valve so that the evaporator and condenser can switch roles. This is called a heat pump, and it can be used to either cool or heat an area.

Figure 1 – The basic refrigeration cycle.
Figure 1 – The basic refrigeration cycle.

HVAC System Components and Configurations

Within the realm of residential and light commercial buildings, there are many types of HVAC systems used, with many variations available within those types. Some of the most common system types include:

  • Packaged units. These are all-in-one units where all the system components are contained in one cabinet that is mounted on an exterior wall in a wall or window opening. They include packaged terminal air conditioners (PTAC) and window air conditioners. These are typically used in hotels and residential applications. The cooling capacities in packaged units are low.
Figure 2 – Packaged window air conditioning unit.
Figure 2 – Packaged window air conditioning unit.
  • Non-ducted split (mini-split) systems. In this configuration there are two main components mounted separately, an outdoor unit with the compressor and condenser (called a condensing unit) and an indoor unit with the metering device and the evaporator. The indoor and outdoor units are connected by insulated copper tubing that allows the refrigerant to flow between the units. The indoor unit can take several different forms (wall-mount, floor-mount, or ceiling cassette), but it is usually exposed in the space it serves. These systems can have multiple indoor units connected to a single condensing unit. Condensing units are typically mounted on grade but can be mounted on a wall bracket, a shelf, or on a roof.
Figure 3 – Split system indoor evaporator unit (left) and outdoor condensing unit (right).
Figure 3 – Split system indoor evaporator unit (left) and outdoor condensing unit (right).
  • Ducted split systems. This configuration is like mini-split systems except that the indoor unit is concealed in a mechanical room, attic, or basement, and the conditioned air is distributed from the indoor unit to the spaces served through ductwork. These systems are typically used in single-family homes and small commercial buildings and often include a gas furnace for heating.
Figure 4 – Ducted split system - indoor air handling unit.
Figure 4 – Ducted split system - indoor air handling unit.
  • Rooftop packaged units (RTUs). These types of systems are also packaged units in that all components are contained in a single cabinet. However, unlike PTAC and window AC units, RTUs almost always include ductwork to distribute the conditioned air. These systems are rarely used in residential buildings and can vary from small to large and include many options and accessories.
Figure 5 – Rooftop packaged unit.
Figure 5 – Rooftop packaged unit.

HVAC’s Role in Building Damage Assessments

With a basic understanding of these systems and components, where they might be located, and how they may be impacted in a loss event, it is easier to address building damage assessments involving HVAC systems and components.

Outside units, such as the compressor/condenser units for homes or commercial rooftop units that are mounted on stands and curbs, are often damaged by wind or hail. Improperly secured units can be toppled over by wind, and the softer metals on the units (such as the exposed evaporator coil cooling fins) can be damaged by hailstones. Larger, more dense hail may also cause impact damage to the unit chassis.

Rooftop HVAC equipment installations on low-slope roof systems are often the source of roof leaks, particularly at the mounting curbs. Improper flashing of the roof membrane at equipment curbs or at thru-deck penetrations such as pitch pockets (which allow for passage of refrigerant, water, and natural gas piping, as well as electrical cables and conduit through the roof to the HVAC equipment) will often result in water intrusion into the property. Building codes require proper mounting and securing of rooftop units. Units that are simply mounted on timbers or which rest directly on the roof membrane system are not building code compliant and will likely result in damage leading to water infiltration.

Package units mounted outside exterior walls that include thru-wall ducting can be the source of water intrusion if the thru-wall components are not properly protected from rain, or if the thru-wall passages allow for exchange of air (inside/outside), which affects the balance and efficiency of the HVAC system.

Air conditioning equipment can generally be repaired if it is of a recent vintage and exact replacement parts are available. However, for older units and systems, especially those using ozone-depleting refrigerants such as R-22, replacement parts are likely not available. In these instances, the entire unit will need to be replaced. If a split system condensing unit is replaced, then the indoor unit will need to be replaced as well. This is required because most building Energy Efficiency Codes require that all system components be designed to work together and certified for efficiency by an approved testing agency such as the Air-Conditioning, Heating, & Refrigeration Institute (AHRI). [2] Although other avenues are available to certify the operation and efficiency, they are seldom used due to the high cost.

Attic and closet mounted air handlers can be a source of moisture inside the building from condensation on cold surfaces (ducts and refrigerant pipes) and overflowing condensate pans. As an example, condensation dripping from an uninsulated copper line could cause stains on ceilings or finishes. This moisture can also lead to eventual structural deterioration and possible mold contamination.


In summary, HVAC systems contribute to well-being and safety in our lives. HVAC systems keep us comfortable at home and make it safer for us at work. These systems can also cause damage to properties if not properly installed and maintained or if they get damaged during a loss event. It’s important to know how they function and where they are generally located on a property to perform an HVAC system evaluation of the condition of their components.

A prompt evaluation by an expert is often necessary for proper repair or replacement of HVAC components, since even minor damage to a component could cause or extend business interruption impacts. Depending on the type and complexity of the loss, HVAC claims can require mechanical, electrical, and plumbing experts; environmental, health, and safety experts; fire origin and cause experts; and forensic engineers to assist in the evaluation of the equipment. Additional experts, including building consultants and forensic accountants may be needed to assist with the valuation of the damages and any business interruption impact from the loss.


We would like to thank our colleagues Keith Madigan, PE, LEED AP (BD+C, O&M), BEAP, BCxP, CDT, Walter Janus, PE, and Stephen Towne, RRC, CBC, for providing insight and expertise that greatly assisted this research.

Keith Madigan is a Vice President and MEP Engineering Service Line Manager in J.S. Held’s Equipment Consulting practice. He is a licensed professional engineer with over 30 years’ experience in providing building and infrastructure design, construction management, and consulting services for clients in the private and public sectors. His experience includes assignments in construction management support, multi-discipline property condition assessments, building code consulting, and LEED/green building consulting. Keith’s assignments have additionally included construction defect investigations, building envelope evaluations, MEP commissioning, and forensic investigations/expert witness support for insurance and legal clients.

Keith can be reached at [email protected] or +1 410 598 1670.


[1] BBC World Serve, (June 5, 2017) 50 Things That Made the Modern Economy. Tim Harford

[2] 2015 International Energy Efficiency Code (Country Club Hills, IL: International Code Council Inc., 2014): C-40

ASHRAE. (2016). Handbook HVAC Systems and Equipment. Atlanta, GA: ASHRAE

ASHRAE. (2017). Handbook Fundamentals. Atlanta, GA: ASHRAE

Find your expert.

This publication is for educational and general information purposes only. It may contain errors and is provided as is. It is not intended as specific advice, legal, or otherwise. Opinions and views are not necessarily those of J.S. Held or its affiliates and it should not be presumed that J.S. Held subscribes to any particular method, interpretation, or analysis merely because it appears in this publication. We disclaim any representation and/or warranty regarding the accuracy, timeliness, quality, or applicability of any of the contents. You should not act, or fail to act, in reliance on this publication and we disclaim all liability in respect to such actions or failure to act. We assume no responsibility for information contained in this publication and disclaim all liability and damages in respect to such information. This publication is not a substitute for competent legal advice. The content herein may be updated or otherwise modified without notice.

noun_Download_747989_000000 Created with Sketch. Download PDF
You May Also Be Interested In

Evaluating Equipment Replacement Costs for Gas Station Losses

Fuel station technology is evolving rapidly. Fuel dispensers, underground storage tank monitoring systems, and point of sale systems are closely integrated and reliant on each other for the station to function. If one component of...


Equipment Costs - Civil Construction

In an ideal world, the insurer will be notified of a builder’s risk loss in a timely manner and prior to completion of repair work. This allows for discussions with the contractor on appropriate methods...


Defining Indemnity in the Context of Actual Cash Value Calculations

The concept of indemnification for loss is at the core of property insurance reimbursement. Insurance policies are designed to put the policyholder in the same position he or she would have been in had no...

Keep up with the latest research and announcements from our team.
Our Experts