Generally, with any insurance policy- you need to read the fine print. For every 1 page of what the policy covers, there are 3 pages for what it does not cover. Unfortunate, but the truth.
As far as 3rd party home warranties go, there are different levels of home warranties and different companies will cover different things and levels. And you'll have sometime an expensive deductible to pay for a homeowners warranty company to pick up the rest of the tab. And usually you will have to pay 100% of the bill, and then submit your bill to get some partial reimbursement from the H.O. warranty company.
Most warranties will have a pretty hefty "co-pay" like $1000 before they kick in.
Get 3 heating contractors to give you a written estimate- labor and materials.
Hope that helps. Good luck,
It depends on why the furnace needs to be replaced. If you are replacing it because of normal wear and tear, old age or switching over to another type of heat, insurance will not cover it. If it needs to be replaced because of a disaster maybe... depending on your policy and coverage. I hope this helps, stay warm!