When looking to buy a home, most experienced buyers know to ask if the furnace is updated. Why? They are expensive to replace, and no one wants that scenario to happen right after moving day. If something goes wrong, is a furnace covered under homeowners insurance? As with most questions when it comes to insurance policies, the answer is “it depends.” If the furnace breaks due to a covered loss, then you may have coverage. For example, if your house is destroyed by a fire, and that fire also destroys the furnace, it’s likely your policy will cover that specifically. Coverage will be capped at your policy’s limit once the deductible is paid. But, furnaces breaking down due to things like improper installation, mechanical issues, or years of use are not covered by homeowners insurance. Earthquake and flood damages are also usually not covered.
Optional equipment breakdown coverage
Now that we have answered the question “does homeowners insurance cover furnaces,” it’s time to look at extra coverage. If your homeowners policy doesn’t cover furnace replacement, you could look at purchasing equipment breakdown coverage. Please note, this coverage does not reimburse homeowners for furnaces replaced due to wear and tear. It is the homeowner’s responsibility to perform routine maintenance and upkeep. However, appliances, electronics, and equipment that is damaged or destroyed by a power surge, electrical breakdown, etc. could be protected by this extra coverage. Whole home warranties are expensive, and it is often cheaper to buy new appliances after an incident versus paying the deductible and service call. So, consider purchasing specific coverage for specific items, if only for peace of mind. Equipment breakdown insurance will likely offer coverage with limits way beyond the ones listed in your homeowner’s policy.
Filing an HVAC insurance claim
In a standard policy, furnaces and other units are covered in provisions for dwelling and personal property. A deductible comes with coverage, meaning you will be required to pay a certain amount upfront before your insurer will cover the rest. Starting the process of filing a claim is as easy as contacting your insurance company or calling 911 first if criminal activity was involved. Take photos of the damage, prepare a home inventory, and be ready to provide policy information. A claims adjuster may be assigned. He/she determine the worth of the furnace. You will either be reimbursed at the replacement cost or the furnace’s actual cash value. The former is the cost of replacing it with a new or similar version, and the latter is how much the furnace was worth before it was damaged.
Additional info about furnace replacement
To recap, the question “is a furnace covered under homeowners insurance?” was answered with a solid “maybe.” Windstorms, hail, fires, and blizzards are typically covered, while floods, earthquakes, and mudslides are not. Standard policies will also not cover furnace replacement if the furnace was misused, improperly installed, or neglected. Taking preventative action can help. This includes changing filters every two months and testing the heating system for carbon monoxide leaks. Do make sure that this test is done professionally! If your furnace is twenty years or older, consider buying a new one before the old one fails. Keep in mind that most policies have coverage limits. You can purchase additional coverage, or you can pay the deductible and the leftover amount. Ask your insurance agent about your policy’s specifics and compare prices of equipment breakdown coverage.