Does Home Insurance Cover Hot Water Heaters?

Homeowners insurance policies disallow coverage for appliance repair. When hot water heaters, dishwashers, laundry machines, and other conveniences break down because of age or normal wear and tear, insurers consider it a maintenance issue, not a casualty event. However, if a covered peril, such as a storm, damages or destroys your water heater, your homeowners insurance will repair or replace it.

Your homeowners policy excludes appliance maintenance, repair, and replacement regardless of fault. Even if the breakdown is completely beyond your control, the occurrence is simply not included in your coverage. Specifically, homeowners insurance policies bar claims for water heaters because of the following:

  • Age of the appliance
  • Wear and tear
  • A manufacturing defect in the water heater
  • Faulty installation
  • Plumbing problems in the pipes connected to the water heater

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Covered Perils: When Your Water Heater Is Covered

Homeowners insurance policies enumerate specific events that qualify for coverage. Known as covered perils, these occurrences impact homeowners on an infrequent but predictable basis. 

For instance, in certain parts of the country, tornadoes commonly strike in the springtime. Though the chances of one hitting a particular residence is small, insurers expect a certain number of policyholders to file claims because of tornadoes during any given year. Covered perils consist of casualty events beyond the control of the policyholder: No amount of maintenance or due care prevents a tornado.

Common covered perils include the following:

  • Tornadoes
  • Lightning strikes
  • Wind damage
  • Water leaks
  • Fires
  • Vandalism
  • Burglary

If a covered peril damages or destroys your water heater, your insurer will pay to repair or replace it, along with any other property impacted by the event. Insurers categorize your water heater as personal property, making it eligible for coverage. The same reasoning applies to other household appliances.

Non-Covered Perils: When Your Water Heater Is Not Covered

Though your insurer covers your domicile and personal property if impacted by a covered peril, your homeowners insurance specifically bars certain events from coverage, including earthquakes and floods. Should your home be inundated by floodwaters or collapse to smithereens in an earthquake, the expense of repairs and replacements remains with you.

If you live in an area prone to floods or earthquakes, you can purchase separate policies for these eventualities. In fact, some mortgage companies require borrowers to purchase flood coverage. The federal government guarantees homeowners ability to purchase supplemental flood coverage even if they live in a location with a high risk of water damage. 

Earthquake insurance may be a good idea if you reside in California or other areas near fault lines. However, you must prepare to pay more out of pocket if an earthquake strikes because these policies require very high deductibles, sometimes $10,000 or more. Having earthquake insurance and money set aside to cover out-of-pocket costs is prudent if your home is at risk from earthquakes.

What If Your Water Heater Leaks?

A leaky water heater often results in a call to a repair person and a bill for fixing the problem or replacing the appliance. The mechanical issue with the water heater counts as a maintenance problem–making it your responsibility to fix it.

However, should a burst of water from the leak damage your home, remediating the destruction may be covered under your homeowner’s policy. While appliance maintenance is excluded, damage from water leaks is not, so a burst pipe from your water heater that ruins personal property or part of your domicile may be eligible for compensation under your homeowners insurance.

Homeowners insurance provides valuable assistance when catastrophic events impact your residence. Though mechanical issues with water heaters are disallowed from coverage, your policy pays for a new appliance when damaged or destroyed by a covered peril or if a leak from it wreaks havoc on your dwelling.

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