A system and method is presented for a fail-safe sensor for an HVAC system. The sensor comprises a temperature detector operable to measure a temperature of a component or a medium present at the sensor, a PTC heater operable to heat the sensor to a self-regulating temperature, the heater comprising a resistive element having an electrical impedance which increases with increasing temperature in accordance with a positive temperature coefficient characteristic, and a sensor housing comprising the PTC heater and the temperature detector provided within a single housing. An algorithm is provided for HVAC systems, wherein the sensor is heated to the self-regulating temperature by the PTC heater and is then measured by the temperature detector to confirm that the temperature detector is operating properly. Further, the sensor may be allowed to cool to a temperature of the surrounding medium or the component for sensing the temperature thereof. Thereafter, by calculating the time constant of the thermal decay rate of the sensor, the presence or absence of the component or medium surrounding the sensor may be determined in a fail-safe manner by an analyzer, for example.