Homeowners insurance covers furnace replacement only in specific situations. When your furnace is damaged or destroyed by a covered peril, like fire, lightning or a burst pipe, your policy's dwelling coverage pays for repairs or replacement, subject to your deductible and coverage limits. However, insurance won't cover breakdowns due to wear and tear, poor maintenance or age.
Does Homeowners Insurance Cover Furnace Replacement?
Updated: September 9, 2025
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Key Takeaways
Homeowners insurance policies cover furnaces damaged by a covered peril, such as a fire, lightning strike, explosion or sudden water damage from a burst pipe.
Standard home insurance policies won't cover furnace damage due to neglect, wear and tear or flooding and earthquakes.
Equipment breakdown coverage is an optional add-on that covers furnace repairs or replacements due to mechanical or electrical failures, which standard policies don't usually cover.
Is Furnace Replacement Covered by Homeowners Insurance?
ARE OTHER HEATING SYSTEMS COVERED THE SAME WAY AS FURNACES?
Homeowners insurance generally applies similar rules to boilers, heat pumps, pellet stoves and other permanent heating systems. However, portable space heaters and temporary heating devices are typically excluded or have limited coverage. Always check whether your policy treats your heating system as part of the dwelling or as personal property because this can affect coverage limits and claim handling.
When Does Homeowners Insurance Cover Furnace Replacement?
Furnace replacement is covered under the dwelling coverage portion of your homeowners insurance when a sudden, unexpected event damages it. Common covered perils include:
Fire or Smoke
If your furnace is damaged or destroyed in a house fire, your insurance covers the cost of repair or replacement. Even smoke damage alone can trigger coverage if it affects the furnace’s functionality.
Lightning
A direct lightning strike can fry your furnace’s electrical components. A sudden power surge can short-circuit your furnace’s motor or electronics.
Explosion
If there’s an explosion, such as from a gas leak, and your furnace is damaged in the blast, that’s a covered peril. It doesn’t matter if the explosion originated in the furnace or elsewhere in the home.
Weight of Ice, Snow or Sleet
If the roof or another part of your home collapses under the weight of heavy snow and damages your furnace, insurance covers it. This applies to sudden structural failures, not long-term buildup.
Windstorm or Hail
If strong winds or hail damage an exterior structure housing your furnace (like an attic or basement vent), any resulting damage to the furnace itself can be covered. This is more common in homes where parts of the HVAC system are exposed.
Falling Objects
A falling tree or large branch can crush the part of the home where your furnace is installed, damaging the unit. Insurance would typically cover the cost if the fall was sudden and unpreventable.
Vandalism or Theft
Insurance covers the damage if someone breaks into your home and vandalizes or steals parts of your furnace. But this usually requires a police report and evidence of forced entry.
Sudden and Accidental Water Damage
Water from a burst pipe that damages the furnace is covered. This doesn’t apply to long-term leaks or water from outside sources like floods.
When Is Furnace Replacement Not Covered by Homeowners Insurance?
Homeowners insurance doesn't cover furnace damage from preventable, intentional issues or those outside the insurer's responsibility. Understanding what isn't covered helps you maintain your furnace properly and file legitimate claims.
Normal Wear or Tear
Damage due to the furnace's age or general use isn't covered. Over time, parts naturally degrade and need replacement, which is the homeowner's responsibility.
Lack of Maintenance
Insurance won't cover the costs if the furnace breaks down due to poor or no maintenance. Regular servicing is crucial to keep it working properly.
Intentional Damage
Damage caused deliberately by the homeowner is excluded from coverage.
Utility Failure
Damage from external utility issues, such as electrical surges or gas leaks outside your home, isn't covered.
Manufacturer's Defect
If your furnace breaks down due to a manufacturing defect, the manufacturer is responsible, not your insurance.
FURNACE REPAIRS VS. REPLACEMENT: WHAT’S COVERED?
Your policy might cover either repair or replacement, depending on the type and extent of damage. Your insurer approves a repair claim if the furnace can be fixed affordably after a covered peril. But if the furnace is beyond repair, it approves a replacement up to your dwelling coverage limits.
Extra Insurance for Furnace: Equipment Breakdown Coverage
Equipment breakdown coverage is a home insurance add-on that pays to repair or replace appliances and systems, like your furnace, when they fail due to internal mechanical or electrical issues.
Although standard homeowners insurance only covers furnace damage from external perils like fire or lightning, equipment breakdown coverage covers when the unit shorts out, overheats or suffers a motor failure. This coverage helps if your furnace stops working due to a sudden internal breakdown that isn't caused by a covered peril or neglect.
WHO SHOULD GET EQUIPMENT BREAKDOWN COVERAGE?
Homeowners with newer, high-efficiency furnaces or complex HVAC systems should consider this add-on. If you rely heavily on your furnace during colder months or can't afford a surprise $3,000+ repair or replacement, equipment breakdown coverage provides peace of mind at a low cost. Just keep in mind that availability varies by state, so it’s important to confirm whether your insurer offers this coverage where you live before counting on it.
Equipment Breakdown Coverage vs. Home Warranty: Which Helps More With Furnace Repairs?
Both equipment breakdown coverage and home warranties cover unexpected furnace repairs, but they offer different types of protection. One is an affordable insurance add-on, while the other is a standalone service contract with broader, more costly coverage. They compare this way for furnace protection:
Policy Description | Add-on to home insurance | Separate service contract |
Covers Wear & Tear | No | Yes |
Covers Internal Failure | Yes, if sudden and accidental | Yes, often includes gradual issues |
Covers Power Surges | Yes | Rarely |
How You File a Claim | Through your insurance provider | Through the warranty company |
Service Fees | Typically none | Usually $75–150 per visit |
Extra Insurance for Furnace: Ordinance or Law Coverage
Sometimes, building codes may have changed since your furnace was installed. Ordinance or law coverage, an optional part of homeowners insurance, helps pay for upgrades needed to meet current codes.
For example, if your furnace room now requires additional ventilation or a different type of exhaust system under new safety regulations, the added cost might not be covered under standard dwelling coverage. Homeowners in older houses or areas with frequent code updates may want to consider adding this protection.
How to File a Furnace Replacement Claim
Filing a homeowners insurance claim for a broken furnace involves documenting the damage and contacting your insurer. Each insurance company has specific procedures, so communicate clearly and follow its guidance throughout the claim process. Follow these steps to file a claim for a broken furnace:
- 1
Document the Damage
Before touching anything, take photos or videos of the damaged furnace. This visual evidence is crucial for your insurance claim.
- 2
Review Your Policy
Check what your homeowners insurance policy covers, especially for HVAC systems.
- 3
Contact Your Insurance Company
Inform your insurance provider about the broken furnace as soon as possible. Fill out the claim forms they will send you with accurate and detailed information about the furnace damage.
- 4
Schedule an Inspection
Your insurance provider sends an adjuster to inspect your home and the damage and assess repair or replacement costs.
- 5
Gather Repair Estimates
Obtain quotes from licensed professionals for repairing or replacing the furnace. The insurer uses these estimates for the claim evaluation.
- 6
Review Settlement Offer
Once the claim is processed, review the settlement offer carefully. Ensure it covers the necessary costs before accepting.
- 7
Complete the Repairs
After the claim is settled, proceed with the repair or replacement of your furnace as agreed in the claim.
HOW LOSS OF USE HELPS DURING HVAC REPAIRS
If your HVAC system is damaged by a covered peril and your home becomes uninhabitable, loss of use coverage can help pay for temporary living expenses like hotel stays, meals, and transportation. This part of your homeowners insurance covers you while your heating or cooling system gets repaired and your home is restored.
When Should You File a Claim vs. Pay Out-of-Pocket for Furnace Damage?
Filing a furnace claim isn’t always the smartest move, especially when repair costs are low. For example, if your deductible is $1,000 and the repair bill comes to $1,200, insurance would only cover $200 after you pay out-of-pocket. In that scenario, the small payout may not be worth the hassle, or the risk of higher premiums down the line.
On the other hand, if your furnace is damaged beyond repair and replacement costs $7,500, filing a claim makes far more sense. With the same $1,000 deductible, your insurer could cover $6,500 of the total bill, making the process financially worthwhile. Always compare the estimated repair or replacement cost against your deductible before deciding whether to file.
Can You Choose a Different Heating System After a Covered Loss?
If your furnace is destroyed by a covered peril, you might wonder if you can replace it with a different type of heating system, like a heat pump. Many insurers will only pay for “like kind and quality” replacements, meaning you’ll get coverage for a comparable furnace, not a full system upgrade.
If you want to switch to a different type, your insurer might cover the cost equivalent of replacing the old furnace, and you’d pay the difference.
Maintenance Tips to Prevent Furnace Claim Denials
Regular furnace maintenance ensures longevity and efficiency. Here's how to keep your furnace in top condition:
- Change Filters Regularly: Replace or clean the furnace filter every three months or more frequently if you have pets or a dusty environment. This keeps the airflow unobstructed and reduces strain on the furnace.
- Have Professional Inspections: Get a qualified technician to inspect and service your furnace once a year. This identifies issues before they become significant problems.
- Keep the Area Clear: Keep the area around your furnace free of debris, dust and flammable materials. This reduces fire risks and improves efficiency.
- Check the Thermostat: Regularly test and calibrate your thermostat to ensure it's functioning correctly and efficiently controlling your furnace.
- Inspect Venting Systems: Check the furnace's venting system for blockages, leaks or corrosion. Proper venting is crucial for safety and performance.
- Monitor for Odd Noises or Smells: Watch for strange noises or odors from the furnace.
- Educate Yourself on Your Furnace: Understand how your furnace works, its model and specific maintenance needs. This knowledge helps with troubleshooting and discussing issues with professionals.
With regular upkeep, you can extend the life of your furnace and avoid unexpected breakdowns that your insurance might not cover.
Home Insurance Coverage for Heating System Replacement: Bottom Line
Homeowners insurance covers furnace replacement only when a covered peril causes the damage, not for age, neglect or gradual breakdowns. To avoid costly surprises, keep your furnace well-maintained and understand your policy limits. For broader protection, explore additional coverage options and compare quotes from multiple home insurance providers.
Broken Furnace Under Homeowners Insurance Coverage: FAQ
Your home's furnace is a vital built-in appliance covered by homeowners insurance. Understanding furnace maintenance and the claim-filing process helps you protect your investment and handle covered damage. We answered common questions about furnace coverage.
Does homeowners insurance cover a furnace damaged by a power surge?
Homeowners insurance doesn't cover a furnace damaged by a power surge unless the surge was caused by lightning. You need equipment breakdown or surge protection coverage for other power surge damage.
Will insurance cover furnace replacement due to age?
Insurance won't cover furnace replacement due to age. Age-related breakdowns are considered normal wear and tear and aren't covered.
Is water damage from a leaking furnace covered?
Water damage from a leaking furnace is covered if it's sudden and accidental, but the cost to repair or replace the furnace itself isn't covered.
Can I add extra coverage for my furnace?
You can add extra coverage for your furnace. Consider a home warranty or equipment breakdown coverage to protect your furnace against mechanical issues that standard insurance doesn't cover.
Homeowners Insurance Coverage for Furnace Replacement: Our Review Methodology
MoneyGeek analyzed quotes from multiple insurance providers across the U.S. using an average homeowner profile. We considered different locations and companies to provide reliable cost estimates and demonstrate why comparing rates is important.
Homeowner Profile
We created a sample homeowner profile with these characteristics:
- Good credit score (769–792)
- Home constructed in 2000
- Wood-frame construction
- Composite shingle roof
Homeowners Insurance Coverage Details
Unless otherwise specified, we used these coverage limits to collect quotes for our comparison:
- $250,000 in dwelling coverage
- $125,000 in personal property coverage
- $200,000 in personal liability coverage
- $1,000 deductible
We also compiled data for policies with broader coverage to determine the best companies for insuring expensive homes, increasing limits to $1 million in dwelling coverage, $500,000 in personal property coverage and $1 million in liability coverage.
HVAC Insurance for Homeowners: Related Articles
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.