Having the furnace fail during the winter can be a nightmare, and replacing it can be expensive. If you suddenly find yourself needing a new furnace, your homeowners insurance policy may or may not cover the cost. It will depend on why the furnace broke down.
Your Insurance Will Pay If the Furnace Is Damaged by a Covered Peril
A homeowners insurance policy covers sudden damage caused by a series of perils. Fire and storms are two of the most common sources of homeowners insurance claims and are among the perils that are generally covered.
Other perils, such as flooding, are typically excluded from a standard homeowners insurance policy. If your basement floods because of a burst pipe, however, your policy might cover the cost of furnace replacement.Â
Your Insurer Won’t Pay for a New Furnace If You Neglected Your Old OneÂ
Homeowners are responsible for routine maintenance. If you didn’t replace your furnace’s filter as recommended, have the furnace inspected on a regular basis, and have repairs made when they were needed, your insurance company won’t pay for a new furnace when your old one fails. You’ll be on the hook for the cost of a new furnace since you didn’t properly care for the old one.Â
Insurance Won’t Pay If Your Furnace Simply Wears Out
All the systems in your house will gradually wear out over time. At some point, a furnace will stop working because of age and years of wear and tear. In that case, you will be responsible for the cost of installing a new one. Homeowners insurance also won’t cover furnace replacement if the furnace fails because of improper installation.
You Can Purchase Additional Insurance Coverage
A standard homeowners insurance policy might only cover a list of specific perils, or it might cover all perils except ones that are specifically excluded. Insurers give customers additional options so they can customize their coverage to suit their needs, concerns, and budgets.
Your policy might not cover flood damage, for example, but you can purchase a separate flood insurance policy. Your insurance company might offer equipment breakdown coverage that will cover your furnace and other systems if they fail due to a mechanical or electrical breakdown.Â
You Might Find Extra Coverage at Affordable Rates
If you’re interested in purchasing additional coverage, contact your insurance company or agent. The cost will depend on several factors, including your location, your claims history, and your house’s age and condition.Â
Compare rates from several insurance companies and inquire about discounts. You might qualify for more affordable premiums if you bundle your homeowners and auto insurance policies through the same carrier.
