Does Insurance Cover Water Heater Leaks? Everything You Need to Know About Water Heater Leak Claims

A standard homeowners insurance policy covers water damage caused by a water heater. However, insurance will not cover the cost of repairing or replacing your water heater

Today, we’re exploring everything you need to know about water heater leak insurance claims.

Insurance Covers Water Damage Caused by Water Heaters

If your water heater caused water damage, then insurance should cover the cost of repairing that damage.

Generally, insurance covers damage caused by water heaters and other appliances in your home – especially if that damage was sudden and unexpected.

Let’s say your water heater suddenly starts leaking, causing $5,000 of damage to the surrounding flooring and drywall. Insurance should compensate you based on the cost of restoring the area to pre-loss condition.

Exception: If your water heater wasn’t properly maintained, then insurance may deny your claim. Your homeowners insurance policy requires you to maintain your home. Water heater maintenance, repairs, and replacements are part of that obligation. If you ignored a broken or leaking water heater for years, for example, then insurance could deny or reduce your claim.

Insurance Doesn’t Cover Water Heater Repair or Replacement

Replacing a water heater costs anywhere from $1,200 to $4,500, including the cost of the water heater itself and installation of the water heater.

Insurance is unlikely to cover the cost of repairing or replacing your water heater – even if the rest of the claim is covered; instead, you’ll need to cover this cost out of pocket.

Let’s say your water heater caused $5,000 of damage to your flooring and drywall. Your insurance covers the cost of restoring your property to pre-loss condition, paying $5,000 to repair the flooring and drywall. However, you still need a new water heater – and insurance won’t cover that cost. Instead, water heater repair and replacement is an expected part of home maintenance.

Exception: If your new water heater broke, then it could have been a manufacturing defect or installation error. You may be able to make a warranty claim. Contact the manufacturer about a manufacturing defect. Or, if a water heater was not installed correctly, then contact the installation company – most installers also have a warranty.

Water Heaters Could Be Covered Under Personal Property

Typically, insurance doesn’t cover water heater replacement.

There is an exception, however. Sometimes, water heaters are covered under personal property coverage – similar to how a couch, computer, or TV would be covered.

Your homeowners insurance includes dwelling coverage (to cover the home and its structures) and personal property coverage (to cover the items inside your home). Water heaters, in some cases, fall under personal property coverage.

Some of the situations where you may be able to claim your water heater under personal property coverage include:

• House fire
• Windstorm, hurricane, or tornado claims
• Lightning strikes or surges caused by natural disasters
• Theft or vandalism

If your water heater was damaged in any of the claims above – or in any other situation – then it may be worth contacting your insurer to start a claim.

Why Insurers Deny Water Heater Claims

Even if a water heater caused damage to your home, your insurer may deny your claim for multiple reasons.

Some of the most common reasons why insurers deny water heater claims include:

• Excessive wear and tear or lack of maintenance. If your water heater hasn’t been properly maintained, or if it has excessive wear and tear, then your insurer could deny your claim. As a homeowner, you have an obligation to repair and maintain your water heater.
• Water heater was too old. Water heaters are expected to last 8 to 12 years, on average. If your water heater exceeded its expected service life and later caused water damage, then insurance could deny your claim – even if the water heater was working properly.
• Manufacturing defects. Some water heaters have defects from the manufacturing facility. Cracked pipes or a poor weld, for example, could lead to a denied insurance claim. However, check your water heater’s warranty for a possible warranty claim.
• Improper installation. Sometimes, water heaters aren’t installed correctly, increasing the risk of future water damage. If your water heater wasn’t installed correctly, then your insurer could deny your claim. Many reputable water heater installation companies offer warranties, however, and you may be able to make a warranty claim.

How to Avoid a Denied Water Heater Claim

Water heaters can damage a home. Unfortunately, not all water heater-related claims are covered by insurance.

To avoid a denied water heater claim, service your water heater once per year. Either do it yourself or hire a professional.

One water heater inspection service recommends the following as part of an annual inspection:

1. Draining sediment from the tank
2. Inspecting the anode rod
3. Cleaning the heating elements

You should also perform a physical inspection of the water heater, connecting pipes, and surrounding area. Look for signs of corrosion, rust, decay, or wear and tear.

Final Word

If a water heater causes sudden and unexpected damage to your home, then insurance should compensate you for that damage.

In most cases, however, insurance won’t cover the cost of repairing or replacing the water heater itself. Insurance may also deny water heater claims due to poor maintenance, wear and tear, or other issues.

If your water heater was damaged by a fire, windstorm, or other major event, then it may be possible to make a claim through your personal property coverage – just like you would claim your couch, TV, jewelry, and other personal property.

Stephanie Corona

Stephanie is a property insurance claim expert with over 20 years of experience working as an insurance adjuster, expert witness, appraiser and umpire. She is passionate about sharing her expertise, knowledge, tips and training to help both property owners and Public Adjusters in their pursuit of effectively managing claims and recovering the claim settlement they deserve after a loss.