C&O INVESTIGATIONS: LIGHTNING OR POWER SURGE DAMAGE TO HVAC AND OTHER EQUIPMENT

C&O INVESTIGATIONS: LIGHTNING OR POWER SURGE DAMAGE TO HVAC AND OTHER EQUIPMENT

This blog addresses the lightning or power surge damage investigations to HVAC and other equipment we are often being asked to provide this time of the year. Claims dealing with theft of the copper wiring of these units as well as excessive replacement costs are on the rise.

Lightning or wind storms are two of the most obvious sources of a power surge, but there are other causes as well. A lot of power surge damages are caused by electric power line failures, transformer problems, improperly installed generators, cycling of air conditioning units, generators, and other motors, to name a few.

In addition to lightning, the classic example is a windstorm that causes a tree limb to contact a power line. The breaker at the electric substation senses that there is a problem somewhere on the circuit, and opens momentarily in an effort to blow the closest fuse and isolate the fault. This is what we have all experienced during a storm when the lights momentarily blink off and on. When this occurs all people on the circuit, which could number into the thousands, experience the momentary blink. If an air-conditioner or heat pump is running when the power goes off, it should have a time delay relay to prevent the compressor from coming on right away. If the air compressor fails to turn off and tries to re-start under pressure, it will cause premature failure or burnout of the air conditioning compressor. In this very common case, the cause is most likely the failure of a safety feature of the compressor preventing excess electricity from entering the air conditioner compressor.

Typical HVAC systems or “split systems”, also known as central air conditioning systems are comprised of three main components: the interior unit that consists of an air handler unit, the air filter, a gas furnace or electric heat strip and an evaporator cooling coil or heat exchanger; an exterior unit that consists of a refrigerant compressor, condenser fins/coils and a cooling fan that circulates outdoor air across the condensing coil to cool it; and the air distribution duct system. The refrigerant used with a typical split system is either R-22 or R-410A, although other refrigerant types also exist. After 2010 no AC can use R-22 refrigerant due to the Clean Air Act of 1990.

Figure 1: Dirty Condenser Unit that failed. The unit seized due to the clogged coil (right photo) and damaged contactors and capacitor. The contactor terminals were heavily rusted and it stuck, leading to compressor overload. This is typical failure mode based on our investigations. The insureds and the HVAC techs always claim that power surge caused the failure.

Figure 2: Central air conditioning system compressor, condenser fins/coils and the removed cooling fan (left, placed on the grass) for inspection of the unit. Note the dirty condenser fins. The dirty fins limited the amount of air for cooling, which led to the overheating and failure of the air compressor. No lightning or power surge caused this damage.

Hi-tech damage claims are initially categorized as lightning losses or power surge losses. Based on the results of our investigations, very few (less than 1 percent) of the reported lightning strikes or power surges are caused by lightning or windstorms. Most appliances fail due to refrigerant leak that led to compressor failure, poor installation, lack of maintenance (dirty air filters or dirty condenser coil) or old age (wear & tear) and there may not be any basis in fact for a lightning claim. Air conditioning compressors are particularly susceptible to failure due to poor installation procedures and lack of maintenance. Next to refrigerant leaks, compressors represent the next highest rate of failure of any HVAC component. Out of 21 of lightning strike claims we handled last month, 14 of the claims were a result of a lack of maintenance that resulted in the failure, 5 were misdiagnosed and were repaired on site, 2 had mechanical damage but were under manufacturer’s warranty; none of them was caused by lightning. Nine times out of ten the HVAC technician will tell the insured that he had a "big" power surge; the tech then goes on to recommend replacement of the entire system, including the air handle.

Commercial insureds with 3-phase equipment that isn't properly protected are susceptible to loss-of-phase damage. This condition can occur, for example, if a vehicle strikes a pole and causes a fuse to blow on one of the phases but not the other two. The insured is now in a single-phase condition until the utility can get a lineman dispatched to replace the fuse. HVAC units, elevator motors, and air compressors without loss-of-phase protection to automatically shut them down can all be damaged.

More often than not, the only evidence we find in lightning damaged equipment is a burnt odor and sometimes a capacitor or a small resistor or diode that is burnt through. See Figure 3 for a damaged capacitor following high temperatures and pressures in the system. The capacitor failure was not caused by a power surge. The life of a capacitor is typically 5 years. Run capacitors are used on 1-phase compressors. The run capacitor remains in the circuit all the times to help improve the energy efficiency of the motor. If a run capacitor fails, the motor will draw about 10% too much current and may over heat. If the run capacitor looks over heated or distorted it has probably failed and must be replaced. If the insured fails to change the capacitor, then the compressor will be damaged.

Figure 3. Damaged dual run (fan and the compressor) capacitor of the exterior condenser unit. Note the rusted terminals and the bulging at the top. The top of the capacitor must be flat; this one is bulging like a shaken pop can. If the capacitor is not replaced immediately, it will lead to compressor overheating and failure.

These types of claims involve several steps, to insure prompt and cost-effective investigation of the damage.

First Step- Verification of the Cause of the Damage

The first step involves the verification of the cause of the damage: was it power surge, direct lightning strike, wear & tear, loss of refrigerant, mechanical failure, incorrect installation, failure to inspect/maintain, etc. Knowing what caused a loss to occur is the first step in determining whether or not it will be covered under the insured’s policy. We work with all parties (insured, independent adjuster, public adjuster, insurer, reinsurer, etc.) to identify what happened, why it happened, and if any product recalls or outside factors (such as lack of maintenance, known defects, or wear and tear) contributed to the loss. We identify the distinguishing characteristics of the damages to determine if an electrical event was a viable cause for the loss. Once verified, we work with multiple lightning activity resources, local weather reporting stations for windstorms, and electric utilities to substantiate any reported lightning activity or power irregularities, damaged utility equipment, etc. on the date of loss.

Complemented by STRIKEnet® Lightning verifications and power company incident reports, our assessment reports provide precision and accuracy in resolving small to more complex claims. We had not a single insurer complaining to us for spending $95 to obtain the STRIKEnet® Lightning report. Final reports are made as per the clients’ requirements and they can be few pages long to more comprehensive. The reports include replacement cost, repair cost, restoration as well as salvage options when applicable.

Second Step – Determine the Actual Damages for Repair

The second step involves the establishment of the actual damages for repair (if feasible) of the damaged equipment.

Third Step- Review of Repair Estimates and Invoices, LKQ, RCV/ACV

The third step involves the review of repair estimates and invoices provided by the insured’s contractor for reasonable and customary material and labor charges. This step also includes Like Kind and Quality (“LKQ”) analysis of the HVAC unit reportedly damaged at the insured property to determine the appropriate Replacement Cost Value (“RCV”) or Actual Cash Value (“ACV”). There is an increasing pattern of overstating the amount of actual damages to the HVAC system. We often see recommendations from vendors to replace the entire system, including the air compressor, condenser fins, evaporator coils, and so on, when all that is needed to do the repairs is replacement of a capacitor. Very rarely there is need for such wholesale replacement.

TYPICAL PROBLEMS ASSOCIATED WITH HVAC SYSTEMS

Below, we provide few typical Problems Associated with HVAC Systems during the investigations to HVAC and other equipment.

During the first step we interview the insured and any witnesses to the damage. Witnesses typically tell us that they heard a sound and that they saw sparks and smoke coming out of the equipment; at other times they state that the compressor worked just before the storm and then it stopped working. Even the HVAC repair technicians many times state that the oil was black, or that the insulation was burned or the terminal was blown. They then assume that a lightning hit the unit without performing an investigation into the actual mode of failure.

If the motor windings are electrically sound, then the compressor was not damaged by a surge voltage or lightning stroke. However, a mechanical failure (a broken valve, worn bearing, blocked coils, rusty terminals, etc.) may have been the cause of an electrical failure. On the other hand, an electric failure rarely causes mechanical failure of the equipment.

The often heard statement “the blackened acidic oil indicates the motor was damaged by a lightning stroke” is also false. The compressor oil will blacken and form an acid only when the oil is exposed to excessive heat for an extended period of time. Overheating of the motor-compressor unit is the most frequent symptom of system problems. The heating and charring of motor winding insulation causes a chemical breakdown that combines with the oil. This will then blacken the oil and form an acid. When a motor fails as a result of a surge voltage or lightning stroke, the oil is normally in a like-new condition. A surge voltage or lightning strike occurs in an extremely short period of time which does not allow enough time for the oil to blacken and turn acidic. Thus, if the refrigerant oil is burnt or acidic there is a good chance that the damage is not lightning/power surge related. It should also be noted that burnt or acidic refrigerant oil does not require the replacement of the entire system as is commonly stated.

Another misconception about lightning is that it can damage a motor-compressor unit even if the equipment is turned off during a storm. If a surge voltage or lightning stroke has enough voltage to gap the open contacts on the main contactor, then there will be damage to various other components in the air-conditioner and possibly to the building’s entire electrical system. Therefore, the insulation melts and could possibly start a fire before the air-conditioner is damaged.

We often see problems associated with contamination of the refrigerant, especially the mixing of the R22 with the R410 refrigerants. Many times the air flow through the condensing coil has become clogged with debris; this will cause overheating and subsequent failure of the air compressor.

Other problems include, but are not limited to, corroded terminals, lose terminal connections, high refrigerant pressure, refrigerant leaks, failed electronic controls and sensors, worn out internal components of the compressor, bad electric and mechanical installation, failed fans, a short to ground in the fan motor or a short to ground in the fan motor wires that lead to the motor. and so on. Over time, low refrigerant levels can cause overheating and premature failure of the compressor, often requiring complete replacement of the compressor or the entire condensing unit. The electronic controls and sensor that cause your air conditioner, fan and condenser to kick off and on properly are often the first components to go. Sometimes these sensors are merely knocked out of position causing the air conditioner to cycle constantly or behave erratically.

Terminal Pin Problems

Problems with terminal pins are also a common cause of air-conditioning compressor failure. See Figure 4. If the terminal pins are loose or “blown” on a compressor, then the compressor will need to be replaced. However, pin failure does not indicate damage by a surge voltage or lightning stroke. The most likely cause of a burned electrical terminal on a compressor is a loose electrical connection. This loose connection causes a buildup of heat and results in a burned terminal.

Rusty terminal connections also create the same low voltage condition as loose terminal pins. When a low voltage condition occurs, the motor will slowly fail. This low voltage condition also causes even higher heat to develop at the terminal pin connection causing even greater rust. This results in more disintegration of the connection and causes low voltage to be supplied to the motor which eventually causes the motor to fail or the terminal pin(s) to become dislodged.

It is possible to have damaged pins due a lightning strike, but this is limited to situations where the lighting strike damage is severe. In these cases there is a lot of other evidence of a lightning strike. The condenser fan motor or other electrical components of the system will have been damaged. The wires are burnt and there is evidence of arc marks to the cabinet where the wires run close to the cabinet. There is also considerable damage to other motors and appliances as well as to the electric panel.

Figure 4. Burned compressor plug due to defective (loose) connection to the compressor. Initially the HVAC techs claimed that this was caused by power surge. However, there were no other evidence (storms, lightning, utility reports, etc.) to support that claim. A power surge big enough to do that damage to the compressor plug would have damaged the whole control section, capacitor, contactor and most of the wiring. No such evidence was observed.

In case of any equipment or HVAC compressor-related problem, identify the root clause, without jumping to the conclusion that the equipment was damaged by lightning or power surge. If the compressor is replaced without attending to the root cause, the replaced compressor surely will also fail.

METROPOLITAN ENGINEERING, CONSULTING & FORENSICS (MECF)

Providing Competent, Expert and Objective Investigative Engineering and Consulting Services

P.O. Box 520

Tenafly, NJ 07670-0520

Tel.: (973) 897-8162

Fax: (973) 810-0440

E-mail: metroforensics@gmail.com

Web pages: https://sites.google.com/site/metropolitanenvironmental/

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