Does Homeowners Insurance Cover Furnace Replacement?

Home insurance covers furnace replacement when a covered peril like fire or lightning damages the unit. Your policy's dwelling coverage also protects air conditioners, ductwork, vents and other built-in HVAC components.

Find out if you're overpaying for homeowners insurance below.

Written by Mark Fitzpatrick

Updated: December 1, 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?

Homeowners insurance covers furnace replacement only when a covered peril damages the unit. Your policy's dwelling coverage pays for repairs or replacement after events like fires, lightning strikes or burst pipes cause sudden damage, subject to your deductible and coverage limits. Insurance excludes breakdowns from wear and tear, poor maintenance or age-related deterioration.

Standard policies treat furnaces as permanent fixtures of your home, covered under dwelling protection rather than personal property coverage. This distinction matters because dwelling coverage typically offers higher limits and different claim handling than personal property coverage.

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. Portable space heaters and temporary heating devices are excluded or have limited coverage. 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. 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

Direct lightning strikes or nearby strikes that cause power surges can destroy your furnace's electrical components, control boards and motors. Lightning coverage applies whether the strike hits your home directly or surges through power lines into your electrical system.

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 covers 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 burst pipes, sudden plumbing failures or accidental discharge damages your furnace is covered under standard policies. If a pipe freezes and bursts in your basement, flooding your furnace room and damaging the unit, for instance, it's covered.

When Is Furnace Replacement Not Covered by Homeowners Insurance?

Homeowners insurance excludes furnace damage from preventable issues, intentional acts and maintenance-related failures. Understanding these exclusions helps you avoid claim denials and guides your maintenance routine.

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 keeps 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 covers 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.

Standard homeowners insurance treats your furnace like any other part of your dwelling, covering only damage from external perils like fire or lightning. Equipment breakdown coverage fills this gap by protecting against internal system failures.

Providers like American Family and Auto-Owners offer equipment breakdown coverage, ensuring major home systems like your furnace are covered.

WHO SHOULD GET EQUIPMENT BREAKDOWN COVERAGE?

Homeowners with newer, high-efficiency furnaces or complex HVAC systems benefit from 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 while keeping home insurance affordable.

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 isn't covered under standard dwelling coverage. Homeowners in older houses or areas with frequent code updates should add this protection.

How to File a Furnace Replacement Claim

Filing a homeowners insurance claim for furnace damage requires documentation and clear communication with your insurer. Here's how the process works.

1
Document the Damage
Take photos or videos of the furnace before touching anything.
2
Review Your Policy
Check your homeowners insurance policy to understand what is covered.
3
Contact Your Insurance Provider
Report the damage to your insurer. The best home insurance providers offer 24/7 support.
4
Schedule an Inspection
Your insurer sends an adjuster to inspect your home, assess the damage and estimate repair or replacement costs.
5
Gather Repair Estimates
Get quotes from licensed HVAC professionals.
6
Review the Settlement Offer
Check the settlement offer carefully once your claim is processed.
7
Complete the Repairs
After the claim settles, complete the repairs.

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 pays for temporary living expenses like hotel stays, meals and transportation. This coverage applies while your heating or cooling system gets repaired and your home is restored.

When to File a Claim vs. Pay Out of Pocket for Furnace Damage

Filing a furnace claim makes sense only when repair costs significantly exceed your deductible. With a $1,000 deductible and a $1,200 repair bill, insurance covers just $200 after you pay out of pocket. The small payout doesn't justify potential premium increases or a claim on your insurance record.

But if your furnace is damaged beyond repair and replacement costs $7,500, filing a claim makes sense. With the same $1,000 deductible, your insurer covers $6,500 of the bill.

Claims stay on your record for three to five years and can affect future premiums, so weigh the immediate savings against long-term costs. Compare estimated repair or replacement expenses against your deductible and consider how the claim might impact your rates before filing.

Can You Choose a Different Heating System After a Covered Loss?

If your furnace is damaged by a covered peril and needs replacement, you can keep the same type of system or upgrade to something different, such as a heat pump. Most insurers pay only for a comparable replacement, so they won't cover a full upgrade.

If you install a new type of heating system, your insurer pays what it would have cost to replace the original furnace. You cover the remaining balance yourself.

Maintenance Tips to Prevent Furnace Claim Denials

Keep your furnace in top condition with these steps:

Change Filters Regularly: Replace or clean the furnace filter every three months or more often if you have pets.
Schedule Professional Inspections: A qualified technician should inspect and service your furnace once a year.
Keep the Area Clear: Remove debris, dust and flammable materials from around your furnace/
Test the Thermostat: Check and calibrate your thermostat.
Inspect Venting Systems: Check the venting system for blockages, leaks or corrosion.
Watch for Warning Signs: Strange noises or odors from the furnace signal potential problems.
Know Your System: Understand how your furnace works, its model and specific maintenance needs.

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. Keep your furnace well-maintained and understand your policy limits. Consider equipment breakdown coverage or a home warranty for mechanical failures, and compare quotes from multiple insurers to find the best rates and coverage.

Broken Furnace Under Homeowners Insurance Coverage: FAQ

Your furnace is a built-in appliance covered by homeowners insurance. Common questions about furnace coverage:

Does homeowners insurance cover a furnace damaged by a power surge?

Standard homeowners insurance covers power surge damage only when lightning causes the surge. Surges from utility company issues, grid failures or electrical problems require equipment breakdown coverage or separate surge protection. Document the surge's cause when filing a claim, as insurers investigate the source before approving coverage.

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.

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!

He writes about economics and insurance, breaking down complex topics so people know what they're buying.

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