Does Homeowners Insurance Cover Furnaces?

Spoiler alert: It does, in many cases!

Team LemonadeTeam Lemonade
homeowners insurance furnace

Here’s some good news: Your homeowners insurance policy will keep your furnace protected against many types of damage. 

Your furnace heats your house or apartment, keeping it toasty in cold weather. It’s one part of a larger heating, ventilation, and air conditioning (HVAC) system, which works together to control your indoor climate. 

Let’s talk about what can go wrong with your furnace, and how your home insurance can help.


  • Your base homeowners policy will cover many types of damage to your furnace.
  • An extra endorsement known as Equipment Breakdown Coverage (EBC) will give you additional coverage for certain types of mechanical or electrical failure. It isn’t available in every state, though.
  • EBC also covers other equipment in your home, like central air, your dishwasher, a security system, and much more.
  • Your homeowners insurance (even with EBC) won’t cover your furnace if it simply stops working due to age and ordinary wear-and-tear.

What does homeowners insurance cover in regard to your furnace?

Your furnace (and your HVAC system in general) falls under the Dwelling Coverage (Coverage A) of your base insurance policy. 

That means it’s covered for what the industry terms ‘open perils.’ You’ll be protected against most forms of damage to your furnace—from power surges to fire or lightning damage—with certain big exceptions.

Those exclusions include—drumroll, please:

  • General wear and tear. Appliances get old; they stop working as well; they perish. In this case it would be the homeowner’s responsibility to make repairs or get a new furnace, unless the unit is still covered by the manufacturer’s warranty.
  • If your house floods and damages your furnace, your homeowners insurance policy wouldn’t cover you—you’d need separate flood insurance. (That said, other types of water damage to your furnace, such as from a burst pipe, might likely be covered.) 
  • Mechanical breakdown. Your base homeowners policy doesn’t cover it—but depending on where you live, you can add an Equipment Breakdown endorsement that will. More on that below.

Tell me about this Equipment Breakdown Coverage…

Glad you asked! If you want additional coverage for your furnace, and it’s available in your state, you can add Equipment Breakdown Coverage (EBC). 

This may cover your furnace from additional damages not covered by your base policy, like various types of mechanical, electrical, or pressure-based failure.

At Lemonade, adding EBC would give you coverage up to $100,000, with a deductible of $500.

Another great reason to add EBC to your policy: It covers way more than just your furnace. In fact, it’ll provide extra coverage for certain damages to a wide range of things you may have in your home, like your dishwasher, security system, hot water boiler, sump pump, or many other pieces of equipment.

For more on Equipment Breakdown Coverage, click here.

Would homeowners insurance cover furnace replacement?

If your claim is approved, your furnace would be covered up to the Dwelling Coverage (Coverage A) limit you’ve chosen for your policy. 

The cost of installing a new furnace depends on the type of furnace, the size of the home being heated, and other factors. Forbes estimates that the lowest end cost would be $2,000 (for an electric furnace install), with the higher end hitting $10,000 (for gas or oil furnaces).

So let’s say your furnace is damaged beyond repair by a covered peril.

  • You file an insurance claim. The cost of buying and installing a new furnace will be $8,500, and your Coverage A maximum is $100,000.
  • You’ll be responsible for the $500 deductible, and your homeowners insurance policy would cover the remaining $8,000.

How can I keep my furnace in good shape so it doesn’t break?

An ounce of prevention is worth a pound of cure, as some wise guy once said. Here are a few common causes of furnace damage to keep an eye on:

  • Lack of maintenance. Clean or replace air filters, and have someone perform regular, annual maintenance inspections (take advantage of seasonal discounts!)
  • Overuse. Running a furnace for long periods of time, especially during extremely cold weather, can increase the likelihood of damage.
  • Power surges can cause damage to electronic bits of the furnace.
  • Improper installation. Make sure you work with technicians you trust or that come recommended!
  • Dust and debris can clog up ducts and reduce the flow of air, which can damage the unit overall.

Before we go…

Buying a home and pondering insurance options? Dissatisfied with your current insurance company and looking to make a switch?

You can get your 100% digital quote for Lemonade Homeowners simply by clicking the button below.

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A few quick words, because we <3 our lawyers: This post is general in nature, and any statement in it doesn’t alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade, which differ according to your state of residence. You’re encouraged to discuss your specific circumstances with your own professional advisors. The purpose of this post is merely to provide you with info and insights you can use to make such discussions more productive! Naturally, all comments by, or references to, third parties represent their own views, and Lemonade assumes no responsibility for them. Coverage may not be available in all states.


Please note: Lemonade articles and other editorial content are meant for educational purposes only, and should not be relied upon instead of professional legal, insurance or financial advice. The content of these educational articles does not alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade, which differ according to your state of residence. While we regularly review previously published content to ensure it is accurate and up-to-date, there may be instances in which legal conditions or policy details have changed since publication. Any hypothetical examples used in Lemonade editorial content are purely expositional. Hypothetical examples do not alter or bind Lemonade to any application of your insurance policy to the particular facts and circumstances of any actual claim.