Deductibles, caps and the limits that quietly reduce coverage

Coverage is not binary. Four separate mechanisms — deductibles, per-unit caps, annual aggregates and component sub-limits — can each reduce what a covered repair actually pays.

Updated 2026-09-25 · 5 min read

It is possible for every line on an invoice to be correctly covered and for you to still owe most of the money. Coverage decides whether the contract responds at all; limits decide how much it pays when it does. They are separate questions and the second one is checked far less often.

Four different things called a limit

  • A deductible. A fixed amount you pay per event before coverage applies — $150 or $250 per occurrence is common.
  • A per-unit annual cap. A ceiling on what the contract will pay for any one piece of equipment in a contract year.
  • An aggregate annual cap. A ceiling across the whole agreement, regardless of how it is distributed.
  • Component sub-limits. Ceilings on specific things — pounds of refrigerant, labour hours per visit, a maximum on any single part.

A contract can carry all four at once, in four different places in the document. They are rarely summarised together, which is exactly why they are missed.

"Per occurrence" is doing more work than it looks

A deductible applies per occurrence, and what counts as one occurrence is frequently where money is lost. If a technician visits on Tuesday, diagnoses a fault, orders a part and returns on Friday to fit it, that is one fault — and usually one deductible. Two deductibles on the invoice is worth a question.

The same applies in reverse. Two genuinely unrelated faults found during one visit may legitimately carry two deductibles, even though there was only one trip. Read the definition rather than counting visits.

Some contracts waive the deductible where the repair is the vendor's own return visit for the same fault within a stated window. It is easy to miss, and it applies precisely when you are most annoyed about the second visit.

Caps you only find out about in month eleven

Annual caps are invisible until you approach them, and nobody tracks them because the contract does not send a statement. If a single unit has had a compressor and a control board replaced in the same year, check the per-unit cap before assuming the third repair is covered.

Track the running total yourself. A simple record of what the contract has paid per unit this year is the only way to know where you stand before the vendor tells you.

Sub-limits

The narrow ones catch people hardest because they sit inside a clause that otherwise reads as generous. Refrigerant "included, up to twenty pounds per unit per contract year" is coverage with a ceiling — the twenty-first pound is billable and correctly so.

Labour sub-limits work the same way: coverage for on-site labour up to a stated number of hours per visit, with the excess billed at the contract rate. Where a repair ran long, check whether the overage is real before disputing it.

The arithmetic worth checking

  • Was the deductible applied once per fault, or once per visit?
  • Does the invoice show the deductible deducted, or has it been added as a line?
  • What has this unit already drawn down this contract year?
  • Does any quantity on the invoice — pounds, hours, parts — cross a stated sub-limit?
  • Where a limit was exceeded, is the excess billed at the contract rate rather than a standard rate?

That final point is the one most often wrong. Exceeding a cap moves a charge out of coverage; it does not move it out of the rate schedule. The contract rate still governs the hours.

Keep reading

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