HVAC Insurance: Complete Guide to Protecting Your Heating & Cooling Systems
Compare all HVAC insurance options including home warranties, equipment breakdown coverage, and extended warranties. Learn what each covers, costs, and which makes sense for protecting your furnace, AC, or heat pump.
Quick Answer
You have three main options for HVAC insurance: (1) Home warranties ($50-100/month + $75-125 service fees) cover repairs but limit contractor choice, (2) Equipment breakdown coverage ($25-75/year, no service fees) covers sudden failures through homeowners insurance with full contractor choice, and (3) Extended warranties (varies by manufacturer) extend original coverage. Equipment breakdown coverage offers the best value for most homeowners with HVAC systems worth $5,000+.
Your HVAC system is one of the most expensive components in your home. A new heat pump costs $8,000-15,000, central AC runs $5,000-10,000, and furnaces range from $3,000-7,000. When these systems fail, you need protection — but not all HVAC insurance is created equal.
This complete guide compares every HVAC insurance option: home warranties, equipment breakdown coverage through homeowners insurance, extended manufacturer warranties, and HVAC service plans. I'll show you exactly what each covers, costs, and which makes financial sense for your situation.
HVAC Equipment Coverage
$300-600/year • Up to $5,000-20,000 coverage
Breakdown coverage, extended warranty, and repair protection.
Get Coverage Options →HVAC Insurance Options Compared
Let's cut through the confusion. Here are the four main ways to protect your HVAC system:
| Feature | Home Warranty | Equipment Breakdown Coverage |
|---|---|---|
| Annual Cost | $600-1,200/year | $25-75/year |
| Service Call Fee | $75-125 per visit | $0 (just deductible) |
| Contractor Choice | Network only | Any licensed contractor |
| Coverage Trigger | Normal wear & tear | Sudden breakdown only |
| Claim Limits | $1,500-3,000 per claim | Full replacement value |
| Wait Period | 30 days | Immediate |
| What It Covers | All mechanical failures | Sudden electrical/mechanical |
| Best For | Old systems (10+ years) | Newer systems (3-10 years) |
Option 1: Home Warranty for HVAC
Home warranties are service contracts that cover repair or replacement of home systems and appliances, including HVAC equipment.
What Home Warranties Cover for HVAC
✓ Typically Covered
- Central air conditioning units
- Furnaces (gas, electric, oil)
- Heat pumps (most plans)
- Ductwork (some plans)
- Thermostats
- Normal wear and tear failures
- Parts and labor for repairs
✗ Usually NOT Covered
- Pre-existing conditions (known issues before coverage starts)
- Improper installation
- Lack of maintenance (must provide service records)
- Permit or code violations
- Refrigerant leaks (often capped at $10/pound)
- Systems over manufacturer weight limits
Home Warranty Costs for HVAC
Pros and Cons of Home Warranties for HVAC
Pros
- ✓ Covers normal wear and tear (not just sudden failures)
- ✓ Includes all system components
- ✓ Predictable budgeting (fixed monthly cost)
- ✓ Good for older systems (8+ years)
- ✓ Multiple claims allowed per year
- ✓ Often covers multiple home systems
Cons
- ✗ Expensive ($900-1,800/year total)
- ✗ Service call fees add up fast
- ✗ Must use pre-approved contractors (often slow)
- ✗ Claim limits ($1,500-3,000 typical)
- ✗ 30-day waiting period
- ✗ Lots of exclusions and fine print
- ✗ Difficult claim denials common
Option 2: Equipment Breakdown Coverage (Recommended)
Equipment breakdown coverage is an add-on to your homeowners insurance policy that specifically protects against sudden mechanical or electrical failures of HVAC systems and other equipment.
What Equipment Breakdown Covers for HVAC
Covered Failures:
- Electrical failures: Motor burnout, compressor failure, electrical shorts, power surges
- Mechanical breakdowns: Bearing failures, cracked heat exchangers, failed reversing valves
- Operator error: Thermostat mistakes, incorrect settings causing damage
- Pressure system failures: Refrigerant line ruptures, sealed system failures
- Sudden events: Steam explosions, water hammer, centrifugal force damage
Equipment Breakdown Coverage Costs
Why Equipment Breakdown Coverage Wins
💰 Much Cheaper
$25-75/year vs $900-1,800/year for home warranties. That's 12-36x less expensive for similar sudden failure protection.
🔧 Choose Your Own Contractor
Unlike warranties, you're not stuck with slow, low-quality network contractors. Hire the best HVAC company in your area, get multiple quotes, and make your own choice.
📋 No Service Call Fees
Pay only your homeowners insurance deductible (typically $500-1,000). No $75-125 fee every time you need service like with warranties.
💯 Full Replacement Value
No artificial claim limits. If your $12,000 heat pump fails, equipment breakdown covers the full $12,000 (minus deductible). Warranties often cap at $1,500-3,000.
⚡ Immediate Coverage
No 30-day waiting period. Coverage starts the day you add it to your policy.
Best For:
Newer HVAC systems (3-10 years old), expensive systems ($8,000+), heat pumps, geothermal systems, or anyone who wants affordable sudden failure protection without warranty restrictions.
Option 3: Extended HVAC Manufacturer Warranties
Most HVAC manufacturers offer extended warranties that go beyond the standard 5-10 year limited warranty.
Typical Extended Warranty Coverage
Standard Manufacturer Warranty (Included)
- Parts: 5-10 years on parts
- Compressor: 10 years on compressor (heat pump/AC)
- Heat exchanger: 15-20 years on furnace heat exchanger
- Labor: Usually NOT covered (only 1 year if any)
Extended Warranty (Optional Purchase)
- Extended parts: Extends parts coverage to 10-12 years
- Labor coverage: Adds labor coverage for 5-10 years
- No-hassle replacement: Some offer full unit replacement if major component fails
- Cost: $200-800 at installation time
Pros and Cons of Extended Warranties
Pros
- ✓ Covers labor (standard warranty usually doesn't)
- ✓ One-time cost (no annual fees)
- ✓ Directly from manufacturer
- ✓ Must purchase at installation time
- ✓ Transferable to new homeowner
Cons
- ✗ Only available at purchase time
- ✗ Requires registered installation by certified installer
- ✗ Requires proof of annual maintenance
- ✗ Covers parts only (some plans)
- ✗ Doesn't cover everything (refrigerant, thermostat, etc.)
Option 4: HVAC Service Plans & Maintenance Contracts
Many HVAC companies offer annual maintenance plans that include preventive service and sometimes minor repairs.
Typical Service Plan Includes:
- 2 annual tune-ups (spring and fall)
- Filter changes
- Priority emergency service
- Discounts on repairs (10-15% typical)
- No trip charges for service calls
Important Note:
Service plans are NOT insurance. They cover maintenance and minor repairs, but won't replace a failed compressor or heat exchanger. Think of them as preventive care, not failure protection.
Which HVAC Insurance Should You Choose?
Here's my recommendation based on your HVAC system age and value:
Best for New Systems (0-3 years)
Extended manufacturer warranty (if you're buying new equipment)
- Still under original warranty
- Can add extended warranty at installation time
- Covers both parts and labor for 5-10 years
- One-time cost of $200-800
Best for Newer Systems (3-10 years)
Equipment breakdown coverage through homeowners insurance
- Only $25-75/year
- Covers sudden failures (most likely at this age)
- Full replacement value, no claim limits
- Choose your own contractor
- Combine with annual maintenance plan ($150-250/year)
Best for Older Systems (10-15 years)
Home warranty OR self-insure (save for replacement)
- Covers normal wear and tear (common at this age)
- May be worth it if multiple repairs likely
- OR: Save the $900-1,800/year toward new system
- Equipment breakdown won't cover age-related wear
Very Old Systems (15+ years)
Self-insure and plan replacement
- Most insurance/warranties won't cover systems this old
- Save money for inevitable replacement
- Start planning heat pump upgrade with rebates
- Use calculators to determine best replacement timing
How to Add Equipment Breakdown Coverage
Adding equipment breakdown coverage to your homeowners insurance is simple:
Contact Your Insurance Agent
Call or email your homeowners insurance company and ask about "equipment breakdown coverage" or "mechanical breakdown coverage."
Get a Quote
They'll quote you an annual premium (typically $25-75). Ask about coverage limits, deductibles, and what equipment is covered.
Add to Policy
Coverage typically starts immediately. You'll see the additional premium on your next homeowners insurance bill.
Insurance Companies Offering Equipment Breakdown:
Most major homeowners insurance companies offer this coverage:
- State Farm ("Equipment Breakdown Coverage")
- Allstate ("Equipment Breakdown Protection")
- USAA ("Equipment Breakdown")
- Liberty Mutual ("Equipment Breakdown")
- Nationwide ("Equipment Breakdown Coverage")
- Travelers ("Equipment Breakdown")
Frequently Asked Questions
Is HVAC insurance worth it?
Equipment breakdown coverage is worth it for HVAC systems worth $5,000+ because it costs only $25-75/year and covers sudden failures with full replacement value. Home warranties ($900-1,800/year) are harder to justify unless you have very old equipment (10+ years) likely to need multiple repairs. For new systems under manufacturer warranty, extended warranties ($200-800 one-time) provide good value if purchased at installation.
Does homeowners insurance cover HVAC?
Standard homeowners insurance does NOT cover HVAC failures from normal wear and tear or mechanical breakdown. It only covers HVAC damage from covered perils like fire, lightning, windstorm, or vandalism. You must add equipment breakdown coverage ($25-75/year) to your homeowners policy to protect against sudden mechanical or electrical failures of your HVAC system.
What's the difference between HVAC warranty and insurance?
HVAC warranties are service contracts that cover repairs/replacement but restrict you to network contractors, charge $75-125 service fees, and cap claims at $1,500-3,000. Equipment breakdown insurance is added to homeowners insurance, lets you choose any contractor, has no service fees (just normal deductible), and covers full replacement value. Insurance is typically better value unless you have very old equipment.
Does equipment breakdown cover heat pumps?
Yes, equipment breakdown coverage covers heat pumps including air source heat pumps, mini-splits, and geothermal systems. It covers sudden mechanical failures (compressor burnout), electrical failures (motor shorts), and operator errors. This is especially valuable for heat pumps because they cost $8,000-15,000 installed. Standard homeowners insurance does not cover heat pump failures without this add-on.
Should I get a home warranty for my furnace and AC?
Only if your equipment is 10+ years old and you expect multiple repairs. For newer systems (3-10 years), equipment breakdown coverage ($25-75/year) is much better value than home warranties ($900-1,800/year). Home warranties make sense for old systems likely to need frequent repairs from normal wear, since they cover all mechanical failures (not just sudden breakdowns). But many experts recommend self-insuring instead—save the warranty cost toward system replacement.
Bottom Line: Best HVAC Insurance for Most Homeowners
My Recommendation
For 90% of homeowners: Add equipment breakdown coverage to your homeowners insurance.
- ✓Costs only $25-75/year (12-36x cheaper than home warranties)
- ✓Covers full replacement value with no claim limits
- ✓You choose your own contractor (no network restrictions)
- ✓No service call fees (just your normal deductible)
- ✓Immediate coverage (no waiting periods)
Combine equipment breakdown coverage with an annual HVAC maintenance plan ($150-250/year) for complete protection: the maintenance prevents failures through regular tune-ups, while equipment breakdown insurance protects you when unexpected breakdowns happen despite proper maintenance.
HVAC Equipment Coverage
$300-600/year • Up to $5,000-20,000 coverage
Breakdown coverage, extended warranty, and repair protection.
Get Coverage Options →