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Is Your Water Heater Covered By Homeowners Insurance?

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If your water heater goes out, this can impact a lot of different things inside your home. You need the water heater to function properly, and having homeowners insurance is a very helpful way to stay protected. Homeowners insurance does cover your water heater in the event that it breaks due to a covered peril. Having this protection is a great way to keep your home fully functional and safe while you are living there.

Key takeaways
  • Water heater damage by covered perils is protected by homeowners insurance.
  • The total replacement cost of a water heater is typically not covered.
  • You can choose your deductible in case you need to file a claim.

How your water heater is covered by homeowners insurance

When you have a homeowners insurance policy in place, you are covered up to a certain limit based on various perils. If the damage to your water heater is caused by a fire or explosion, this falls within the coverage limit. You would be able to file a claim and get the necessary repairs so your water heater can function correctly. There are a few different coverage limits on your homeowners policy that can apply to your hot water heater.

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  • Dwelling Coverage: the dwelling coverage on your home insurance policy covers damages that occur within this structure. If your water heater is located here, it will be covered. In case the water heater is located in a detached structure, such as a detached garage, your homeowners policy should still cover it through its other structures coverage which has a significantly lower limit than dwelling coverage.
  • Personal Property Coverage: your policy has coverage in place to protect your personal belongings. In case your water heater bursts and damages your belongings, this is the area that would cover these damages. Depending on your coverage limit, this is how much of the damage the insurance will cover.
  • Additional Living Expense Coverage: In case you must relocate due to your hot water heater breaking, you can potentially get these expenses paid for. This could happen if you need to stay in a hotel or make other arrangements while the hot water heater is being repaired. The coverage can also help you with costs associated with getting your laundry done, funding meals, and other necessary expenses you incur.

Each of these coverages can come in handy if you have a broken water heater. It is important to understand the ways you are covered so you can decide what needs to be done next.

Insurance coverage limits for water heater damage

If you must fix a damaged hot water heater, your insurance is going to have a coverage limit set that will determine how much will be paid. This can vary based on a few different factors, and it will also depend on the type of damage that occurs as a result of the broken water heater. Remember, this coverage does not extend to the water heater if it breaks due to wear and tear or other maintenance-related incidents.

You are going to have a coverage limit and a deductible. The coverage limit is the highest amount covered by the insurance in case you must file a claim. Your deductible is a percentage or a dollar amount you must pay out of pocket before the insurance kicks in to cover the rest.

  • If your dwelling has been damaged as a result of the hot water heater, this is when your dwelling coverage would kick in. The insurer will determine how much is paid out based on the dwelling coverage limit that you set when you first put the policy in place. If you need to double-check what this limit is, you can take a look at your policy’s declarations page.
  • The water heater will be covered by homeowners insurance in case it is leaking, explodes, or causes water damage. This is in effect as long as this damage was caused by a covered peril and not as a result of neglecting to maintain the water heater.
  • In case your personal property is damaged and you must file a claim, this coverage is usually set to around 50% of your dwelling coverage limit. For example, dwelling coverage at $200,000 would mean that personal property coverage is set at $100,000. Again, this will depend on the agreed-upon limits you set when you first purchased the homeowners insurance policy.
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What is Not covered by homeowners insurance

If your water heater has been neglected for some time, any damage as a result of this will likely not be covered by your insurance policy. The insurer expects you to perform routine maintenance on your water heater to make sure it is working properly. This involves having a professional come out to inspect the water heater to make sure that nothing is broken or operating incorrectly.

Regular wear and tear is also not covered by insurance. If the hot water heater is very old, this is automatically considered a bigger liability. If the homeowner decides to not get a replacement or get it repaired so it is functional, then they will not be able to file a claim with their homeowners insurance policy. This is seen as a preventable situation by the insurer.

Another instance not covered by a homeowners insurance policy is intentional damage. If your hot water heater is malfunctioning and you attempt to kick it instead of calling a professional for a repair, this damage is not going to be covered by your homeowners insurance. Because it was intentional, you will be deemed at fault. Any member of the household that causes intentional damage to the water heater is going to automatically exclude it from being covered by a homeowners insurance claim.

Additional Coverages for Your Water Heater

To protect your hot water heater from damage not covered by your homeowners insurance policy, there are endorsements and additional policies you can purchase to cover these gaps.

  • Equipment Breakdown Coverage: this is an endorsement that can be added to a homeowners policy. It covers appliances and systems in the home that can protect your hot water heater from electrical or mechanical issues that need repairs.
  • Earthquake Insurance: damage to your water heater caused by earth movement is going to require a separate policy. Earthquakes are excluded from standard homeowners policies. 
  • Flood Insurance: much like earthquakes, damage caused by flooding will also require a separate policy. If your hot water heater gets flooded, you will need this policy in place to file a claim.

Also read: Deciding on flood insurance deductible

Water heater repair

The cost of replacing your water heater after it failed will probably need to be covered by you. Some insurance policies may cover this, but most homeowners insurance policies will not pay to repair or replace your water heater.

When searching for a cleanup specialist or plumber to handle the water heater itself, try to find the best price. You might find yourself rushing to hire the first cleanup specialist you come across as the water damage is a pressing emergency but try to relax and take your time searching through quotes as the price for the cleanup may be covered by you.

It might also be tempting to stop the flow of water or to start repairs yourself, but it’s recommended that you hold off so that the plumber can see the full extent of the damages. This may come in handy for filing a claim as well so you aren’t faulted for any accidental damages you may cause during the cleanup process.

Act now – not later

Most water heaters come with a warranty that lasts anywhere from 3-6 and sometimes 10 years. If your water heater is under warranty and fails, you may be covered for costs to replace the heater. Whether you have a tankless water heater or a unit with a tank, if you’re coming to the end of your warranty, then it may be smart to check the status of the water heater. See if it’s still in good shape. Better to search for a replacement now while you have the time rather than searching once it’s already failed.

The most important thing is to know your own policy. Seeing if you are covered for damages caused by a broken water heater can prepare you now for when it does fail. Some homeowners insurance policies might not cover damages caused by your water heater and you may find yourself paying for both your home and the water heater replacement.

Check your water heater warranty to keep up to date on how much longer it’s covered to be repaired or replaced. If you’re coming to the end of your warranty, check the status of your water heater. Again, it’s better to know now before it’s an emergency.

Finally, as with most insurance claims, your deductible will come into play with repair costs. If the cost to repair is less than your deductible, then the insurance company will not cover any repairs. This means that if your deductible is $1,000 and repairs are $800, you will have to pay for the repairs out of your own pocket.

Also Read: How to get the most out of your home insurance claim

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