Unfortunately, furnaces have a way of breaking down on the coldest days of the year. At that point, a busted furnace is more than a repair bill – it is an expensive, inconvenient, even threatening problem that needs attention before the pipes freeze.
Our editorial team has also reviewed the federal home-insurance disaster guide, Health Canada’s carbon-monoxide guidance, the federal mechanical-systems safety guide, and Natural Resources Canada’s Greener Homes Initiative page.
Does Home Insurance Cover Furnace Repairs?
Generally, furnace repairs aren’t covered when they’re needed because of decreased efficiency, breakdown, wear and tear, or regular maintenance. Coverage may apply, however, if the furnace is damaged by an insured peril such as fire.
Some resulting damage may be covered, such as when the policy excludes the broken furnace but covers sudden damage from frozen pipes, but check clauses about heating, water, vacancy/absence, maintenance, exclusions, etc.
An optional equipment-breakdown endorsement may pay for certain sudden mechanical/electrical breakdowns; definitions, exclusions, coverage and limits vary.
Start With Safety
| What you notice | What to do now | Do not |
|---|---|---|
| Carbon-monoxide alarm | Leave the area. Call 9-1-1 or your local emergency number as soon as you’re outside and in the fresh air. | Do not try to identify what’s causing the problem. Never return until professionals deem it safe. |
| Natural-gas or rotten-egg odour | Get out of the building immediately. Once outside, call 9-1-1. | Do not operate switches, flames or equipment inside |
| Smoke, flame or sparking | Leave. Call 9-1-1. Follow instructions given by the fire department. | Do not open the furnace. Do not attempt to repair the furnace. |
| No heat without a danger sign | Make sure to protect vulnerable occupants. Check only safe user controls. Call a qualified technician. | Never operate a barbecue or generator indoors. Never use outdoor heaters indoors. |
| Water near electrical equipment | Stay clear, make sure people are out of danger and call the appropriate emergency trade. | Do not stand in water or touch energized equipment |
Safe Checks Before Calling a Technician
Set the thermostat to heat. Make sure the thermostat is set above the current temperature. If it uses batteries, make sure they’re working.
If the furnace has an on/off switch, make sure it and the correct breaker are switched on. If the breaker trips more than once, leave it off and call a technician.
If it has a replaceable furnace filter, check it. Refer to your owner’s manual for the correct filter size and how often to change it.
From the outside, check for obstructions in the furnace’s air intakes and exhaust vents, such as snow, leaves, or ice. Do not reach into exhaust/intake vents.
Check that the home’s supply/return grilles/vents are not covered by furniture, rugs, etc.
If your furnace/thermostat has a display, jot down any error messages to share with the technician. Do not remove furnace access panels.
Only relight pilots, adjust gas valves, or inspect combustion chambers if the manufacturer permits it and you are qualified. Otherwise, have a technician inspect or service the equipment.
What Insurance, Warranty and Service Plans May Pay
| Possible payer | What it may address | What to verify |
|---|---|---|
| Home insurance | Direct damage from an insured event and some resulting insured damage. | The type of damage or loss and its cause; exclusions and deductibles; duties related to notice of the claim and minimizing the loss. |
| Equipment-breakdown endorsement | Specified sudden mechanical, electrical or pressure-system breakdown. | Verify covered equipment, failure definition, wear exclusion, limit and deductible. |
| Manufacturer warranty | Defective equipment or parts if they’re eligible and still under warranty. | Verify conditions related to registration, labour, shipping, maintenance, transfer, etc. |
| Installer labour warranty | Workmanship or labour costs for a stated period of time. | The installer labour warranty will help determine who comes back to perform service, the response times, types of service not covered and more. |
| Rental or protection plan | Repairs, maintenance, or replacement covered under the contract. | Ownership; monthly total; emergency service; cancellation terms; excluded parts. |
| Homeowner | Wear and tear or regular maintenance. Failures excluded from the plan. The homeowner pays all costs and claims below the deductible. | Plan an emergency fund and get written repair options. |
Read More: See How Home Equipment Breakdown Coverage Works
Preventative Maintenance Tips for Furnaces
Have a professional inspect any fuel-burning appliances at least annually, or as recommended by the equipment’s manufacturer.
Keep the area around the furnace clear of items. Never block combustion air openings, air intakes or exhausts. Check vents after snowstorms and during severe winter conditions to make sure they’re not blocked.
Test, change batteries in and replace carbon monoxide (CO) alarms as recommended by the alarm’s manufacturer. Make sure the alarms are certified as CO alarms.
Follow the furnace manufacturer’s recommendations for the type of furnace filter to use and how often to change it. Change the filter more often if it becomes excessively dirty or the furnace is in a dusty or unusually dirty environment.
Keep all invoices, furnace make/model/serial numbers, warranty registrations, annual inspection records and any repair documentation.
Read More: Use the Canadian Home Maintenance Checklist
Repair or Replace: Make the Contractor Show the Math
| Decision field | Repair quote | Replacement quote |
|---|---|---|
| Diagnosis | ASK for proof: What’s broken? What diagnostic test indicates the item is broken? What caused the problem? Ask the contractor to show you how they arrive at a recommendation to replace, including any calculations. | Ask why the item should be replaced rather than repaired. |
| Immediate total | Part, labour, diagnostic fee and tax. | If the decision is repair or replace, ask to see calculations that include equipment, removal, installation, permits and tax. |
| Future exposure | Ask the contractor: How much warranty time is left? Are replacement parts available? Could repairs be needed in the near future? | Ask for calculations about filters, maintenance, backup heat, etc. |
| Sizing | Can the equipment be repaired and continue to be used safely? | Insist on heat-loss calculation for heating. Don’t allow contractors to replace broken equipment with the same size without heat-loss calculation that supports capacity selection. |
| Efficiency | Expected performance after repair. | When considering whether to repair or replace, ask your contractor to provide efficiency modelling and estimated operating costs based on current energy costs in your area. |
| Building work | Ask whether any venting, drain or electrical corrections are needed. | Changes to ducts, venting, electrical, condensate or fuel systems. |
| Warranty | Parts and labour after repair | Verify manufacturer’s & installer’s terms, warranty registration, exclusions, etc. |
| Schedule | Part availability and temporary heat. | Make sure the contractor confirms the installation date, discusses permits, provides an action plan for how to keep things safely operating in the meantime. |
Never accept the unit’s age alone as the reason for replacement. Safety concerns, repair history, part availability, warranty, sizing, operating expenses, and other criteria help determine whether to replace.
How to Check Rebates and Financing Without Using a Stale List
Programs change regularly, so verify current offerings on official federal, provincial and local pages.
- Start with the current federal energy-efficiency initiatives page. It should link to any current federal programs as well as programs in your province/territory.
- Each province/territory has their own website with their own rebates, some shared with other provinces/territories. Check those too. Most have a tool that will give you a list of applicable programs. Usually you need an address/postal code.
- Always get program approval before purchasing/installing equipment or removing old equipment.
- Carefully read the program’s eligibility requirements such as household income, primary residence, energy audits, fuel usage, approved products, and licensed installers.
- Ask about program details, such as who gets the rebate, when you will receive it, what costs are not eligible, and whether you can receive the rebate if you purchase different equipment than what was approved.
- Keep copies of any approval, proof of eligible product(s)/model number, contractor’s licence, invoices, proof of payment, commissioning documents, etc. as specified by the program.
Will a New Heating System Lower Home Insurance?
Get the answer in writing before including insurance savings in your final figures. A change in heating type may qualify for a discount, but confirm that with your insurer or broker.
Some insurance carriers have different underwriting rules. Factors could include the age of your heating system, the type of heating system, auxiliary heating, oil-tank exposure, or your home’s overall condition and systems. Contact your insurer or broker before changing your heating type, as it could change your insurer’s view of the risk.