A drain pan is used in HVAC systems, particularly under air handling units or cooling coils, to collect and direct condensation or water leakage. It is typically placed beneath equipment that produces moisture, such as air conditioners or refrigeration systems, to prevent water damage to the surrounding area. The drain pan collects excess water and channels it into a drainage system or pipe, ensuring that moisture doesn't accumulate and cause issues like mold, rust, or water damage.