If your furnace just quit in the middle of a cold Mississauga winter, your first question might be: “Does house insurance cover furnace replacement?” It’s a fair one, and the answer depends on a few key factors, including the type of damage and the details of your policy.
In this article, we’ll break down what your home insurance might cover when it comes to furnace repairs or replacement, what usually gets excluded, and what options exist if your claim is denied. We’ll also cover how Mississauga homeowners can protect their investment with the right HVAC maintenance and upgrades.
What’s Covered Under Home Insurance?
Most standard homeowners’ insurance policies in Ontario include coverage for “sudden and accidental” damage caused by specific events, also called perils. If your furnace is damaged due to one of these events, your insurance may pay for repairs or a full replacement.
Here are the common covered perils:
- Fire or explosion
- Smoke damage
- Storm-related damage (such as wind or hail)
- Water damage from burst pipes
- Electrical surge from a lightning strike
- Theft or vandalism
So yes, your insurance might cover furnace replacement—but only if the damage results from one of these covered situations.
If you’ve recently suffered damage from such an event, it’s best to get a professional inspection. We offer furnace inspections and repairs in Mississauga and can help document damage for your claim.
What’s Not Covered?
This is where most claims get denied.
Standard house insurance does not cover the following:
- Normal wear and tear
- Old age or corrosion
- Poor maintenance
- Mechanical or electrical failure
- Improper installation or previous damage
In other words, if your furnace stopped working because it’s 15 years old and never got serviced, the insurance company will likely say no. This is why we always recommend regular maintenance—not only does it help your furnace last longer, but it supports your insurance eligibility if a claim is ever filed.
Equipment Breakdown Coverage (Add-On)
One way to bridge this gap is by adding equipment breakdown coverage to your policy.
This optional endorsement covers sudden internal mechanical or electrical failure, including:
- Blower motors and fans
- Electrical shorts and surge damage
- Control board failures
- Burnt-out compressors
If your furnace dies unexpectedly but not due to an insurable peril, this add-on might be your only way to get coverage.
Speak with your insurance provider about this option, especially if your furnace is out of warranty but still within its expected lifespan.
ACV vs RCV: What Will You Actually Get?
If your claim is approved, your payout depends on how your policy calculates value:
- Actual Cash Value (ACV): The cost to replace minus depreciation
- Replacement Cost Value (RCV): Full cost to replace with a similar new system
Most basic policies pay ACV unless you’ve upgraded to RCV. That means if your 10-year-old furnace cost $4,000 when new, but its depreciated value is now $1,200—you’ll only get $1,200 unless your policy includes replacement value.
Want a new high-efficiency model? Check out our furnace installation services for pricing and available rebates.
Can a New Furnace Lower Your Insurance?
Yes, it can.
Replacing your older system with a modern, energy-efficient furnace may lower your premium slightly. Why?
- Safer design reduces fire and CO2 risks
- Improved reliability means fewer breakdowns
- Energy savings often qualify for rebates or tax credits
We can help you understand what unit makes the most sense for your home and budget. And yes, we can provide professional documentation if your insurer requires it during a claim or discount application.
Filing a Furnace Insurance Claim: Step-by-Step
If your furnace has failed due to a covered event, here’s how to move forward:
- Document everything: Take photos, note smells, sounds, or water around the unit.
- Call a professional HVAC technician: We provide official inspection reports you can submit with your claim.
- Contact your insurance company: Ask about your policy’s coverage and next steps.
- Submit your claim: Include estimates, receipts, and any reports we provide.
- Schedule approved work: Whether it’s a repair or full replacement, we can handle the job start to finish.
When Insurance Won’t Pay—What Are Your Options?
If your claim is denied (and many are), you still have several routes:
- Home warranty: Some Mississauga homes are sold with warranties that cover HVAC systems. Check your documents.
- Manufacturer’s warranty: Covers major components, usually for 5–10 years.
- HVAC Protection Plans: We offer seasonal and year-round plans that cover maintenance, repairs, and emergency visits. Ask us about our comfort plans.
- Financing: We help customers spread payments over time for major upgrades. Learn more here
HVAC Group’s Advice for Mississauga Homeowners
We’ve worked with dozens of homeowners across Mississauga and the GTA facing this very issue: an unexpected furnace breakdown, only to learn it’s not covered. Here’s our best advice:
- Keep records of maintenance.
- Upgrade to a newer unit if yours is 12+ years old.
- Talk to your insurance provider about equipment breakdown endorsements.
- Book an annual inspection every fall.
- Know your coverage. Don’t assume you’re protected.
Still not sure where you stand? Reach out to us anytime—we’ll walk you through your furnace’s condition and help you make the smartest choice.
Related Reading:
- How Much Does It Cost to Replace a Furnace?
- Are High-Efficiency Furnaces Worth It?
- What Is an HVAC Company?
Final Thoughts
So, does house insurance cover furnace replacement? Sometimes. If it’s sudden, accidental, and part of a larger covered peril, you may be in luck. But if it’s just age, wear, or neglect, you’re probably footing the bill yourself.
Either way, HVAC Group is here to help with inspections, reports, repairs, replacements, and expert advice.
Contact us today to book a visit or get a quote. We proudly serve Mississauga and surrounding areas.
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