A vehicle is disclosed that has multiple coolant paths selected by control of a three-way valve in which the position of the valve is detectable. A method for detecting the valve position during fault conditions is disclosed. The vehicle has a heating system that includes a first coolant loop with a heating source, a water pump, and a heater core. The heating system also has a second coolant loop that includes an engine and a second water pump, in addition to the elements of the first coolant loop. Temperature sensors are located in each coolant loop. A three-way valve fault is detected by monitoring the behavior of the temperature sensors in response to the position of the three-way valve and the status of the heating sources.