The short answer is “yes,” a furnace replacement is covered under home warranty plans. Most home warranty companies will cover furnace breakdowns that result from regular wear and tear, as well as any unexpected disasters and damages.
Most new furnaces come with a 10 year manufacturer limited parts warranty and a 20 year manufacturer warranty on the heat exchanger which is the heart of the furnace, and the most expensive to repair or replace.
Doors, windows, and walls
A home warranty is primarily designed to cover systems that require complex repair work, such as HVAC, electrical, and plumbing systems. Although doors, windows, and walls are essential components of your home, they do not generally fall under the coverage of a home warranty.
No, HVAC is an appliance, so it'll generally be covered by a home warranty that you get for the first year or two after you move into a new home, but homeowner's insurance is primarily focused on structural damage. Water damage, fire damage, etc.
Most all HVAC units now come with a limited 10 year warranty on the major components. If the unit is more than ten years old, it doesn't pay to fix it anyway so you're better off replacing which will cost less in the long run because you're also going to save money through efficiency gains.
Since a furnace replacement is covered under home warranty plans, you can potentially save thousands of dollars on installation costs. Of course, it's also worth mentioning that home warranty protection extends beyond your air conditioner and heating system.
HVAC and home insurance
A homeowners policy may cover your HVAC in two ways: either through the dwelling coverage or the personal property coverage on your policy. Dwelling coverage may help pay to repair or replace a built-in unit since it's considered part of the home's structure.
A new furnace costs $4,799 on average, but the final total for parts and labor will depend on type of furnace, size of your home, and other factors, like efficiency and brand. Rates may range from $150 to $13,100.
Most carriers consider a furnace's age during their policy evaluation process, with some having specific age limits. For example, a furnace over 30 years old might require proof of annual maintenance to qualify for coverage.
A home warranty is a service contract that pays the cost of repair or replacement of covered items, such as major kitchen appliances, as well as electrical, plumbing, heating and air conditioning systems. A warranty doesn't cover windows, doors, floors or other structural features.
More than likely, your policy doesn't cover flooding or earthquakes. That makes sense since not all areas of the country are prone to earthquakes or flooding. If you need coverage, you'll need to purchase a policy for whichever you need. Earthquake insurance and flooding insurance are two different policies.
A home buyer's warranty usually covers major appliances and/or systems like plumbing, heating, and cooling, and electrical. Some providers and plans let you customize your home warranty insurance coverage by selecting specific combinations of items (e.g., systems plus just the refrigerator and oven).
Lookup Your Furnace Warranty
Also, you can look up your furnace warranty information anytime online. Visit your furnace manufacturer's website, as many have an easy-to-use lookup tool for homeowners. You just need your furnace model number and serial number in most cases.
Homeowners insurance covers HVAC systems when the damage is a result of a covered disaster or peril, including high winds, fallen trees, theft, hail or even a fire. So if lightning strikes your unit and damages its electrical components, your homeowners insurance policy would probably cover it.
HVAC Meaning: What is HVAC? HVAC stands for heating, ventilation and air conditioning systems. This system is responsible for heating and cooling your home and includes products like furnaces, air conditioners, heat pumps as well as ductwork, thermostats and other home comfort controls.
Apply for a grant
The Federal Low Income Home Energy Assistance Program (LIHEAP) helps low-income Americans with heating and cooling expenses. Apart from small grants, LIHEAP offices also help consumers find resources to help pay for the cost of replacing furnaces and air conditioners.
Although the program was approved and the money set aside for it in 2022, the rebates won't be available until sometime in 2024 as each state must still create its own program and have it approved by the federal government before the funds will be made available. Californians will be able to start applying this year.
A good used furnace can easily get $100 to $200 from someone who needs one as long as the heat exchanger isn't cracked, even if someone offers you $50 and hauls it off it's better than the $5 or $10 a recycling yard might offer for one.
For people taking a proactive approach, doing a furnace replacement during the “shoulder seasons” of spring and autumn may offer lower prices, shorter lead times, and a better selection of products and service appointment availability.
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.
You'll be looking at a different cost depending on the location of the furnace, the size of your home, and the type of furnace. But the average cost per unit can range anywhere from $2,672 - $6,575. The national average is $4,820 - $9,350 for a full furnace installation.
Many HVAC companies offer financing to their customers to streamline the HVAC replacement process and paying for it. Banks and credit unions may approve you for a personal loan, home equity line of credit, or a home improvement loan where loan proceeds are used specifically to make the upgrades your home demands.
Does homeowners insurance cover a furnace? A furnace isn't covered for normal wear and tear or replacement. This is considered to be part of your typical home maintenance. However, you may contact your local State Farm® agent for information on Home Systems Protection.
Federal Tax Credits
The Inflation Reduction Act (IRA) of 2022 makes tax credits available on high-efficiency HVAC units through 2032. It allows you to deduct 30 percent of the purchase and installation costs and caps the amount you can write off: Air conditioners, furnaces, boilers, and water heaters max out at $600.