Does home owners insurance cover damage to a carpet due to furnace malfunction?

Most homeowner policies would have coverage for a fire loss. However I recommend that you get an estimate first for repair of the carpet. This is because carpet is pretty cheap these days and the cost may be below your deductible. If it is cheaper than your deductible then I'd just have it fixed myself. No point in having a claim on my history if the cost is below what I would have to pay anyway. If it's much above the deductible then I'd still have it fixed and send the bill to my insurer for reimbursement.