501.02E

Boiler and Machinery / Equipment / Mechanical Breakdown Insurance

Guidance

Equipment Breakdown Insurance covers the:

  • loss due to mechanical or electrical breakdown of equipment; and
  • cost to repair or replace equipment and other damaged property.

Boiler and Machinery Insurance covers unforeseen breakdown of machinery involving equipment specifically identified in the policy.  The breakdown must result:

  • from a cause listed in the policy; and
  • in direct equipment damage.

Requirements

You must ensure:

  • a PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). with any high-pressure, centralized HVAC boiler, water heater, or other vessel that is in operation and regulated by the state or municipality where the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). is located has full Boiler and Machinery Insurance; and
  • the coverage equals at least 100% of the Insurable ValueInsurable ValueFor any Property, the estimate of the maximum dollar amount needed to replace, repair, or reproduce the Property, but excluding any land value. of each building housing the equipment.