My Furnace Broke—Is It Covered by Homeowners Insurance or Equipment Breakdown?

A furnace that stops working because it's old or worn out is not a homeowners insurance claim. What caused the furnace to stop working determines whether another type of coverage applies.

Wear and tear or age

If a 20- or 25-year-old furnace finally quits because components wore out, that's maintenance. Homeowners insurance isn't buying you a new furnace because the old one reached the end of its useful life.

Damage from a covered loss

If lightning strikes your home or a covered electrical surge burns up the control board, the furnace was damaged by a covered loss. That's a homeowners insurance claim, subject to your deductible and the terms of your policy.

A sudden internal breakdown

If the blower motor suddenly seizes and damages the motor and other components, that's different again. The furnace wasn't worn out, and an outside event such as lightning didn't damage it. The equipment itself failed. That's the type of loss equipment breakdown coverage is designed to cover when you've added the endorsement.

What is equipment breakdown coverage?

Equipment breakdown is an insurance endorsement you can add to many homeowners policies for certain sudden mechanical or electrical breakdowns. It can apply to more than the furnace, including air conditioning systems, appliances and other covered home equipment.

It is not a home warranty. A home warranty is a separate service contract. Equipment breakdown also does not turn normal wear and tear into an insurance claim.

What should you do when a furnace stops working?

Call a qualified HVAC technician and ask what failed and why. Keep the written diagnosis, invoices, photos, error codes or other documentation. The diagnosis is what helps determine whether you're dealing with maintenance, damage from a covered loss, or an equipment breakdown claim.

When a furnace or another major piece of equipment stops working, don't start with “Is it covered?” Start with “What happened?” The cause of the failure is what tells us which coverage path applies.