Water heaters are an essential home appliance. They make all hot-water activities possible — from washing greasy dishes to relaxing in the bathtub. Unfortunately, when a water heater breaks, repairing or replacing it can be very pricey, especially if you have to pay out of pocket.

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Most homeowners insurance policies won’t cover water heater repairs, but a home warranty may pick up the slack. So if you want to keep enjoying hot showers, you should know all about home warranty coverage for water heaters.

What’s a Home Warranty?

To understand how a home warranty affects the costs of water heater repairs, you need to learn how they work. Home warranties are a plan that provides homeowners with extra protection. You pay an annual fee, and if something goes wrong with your home, the warranty can help pay for repairs. Home warranties come in all shapes and sizes. You can get one for your entire house, or you can get one that just covers a few key appliances.

Homeowners Insurance Vs. Home Warranty

After hearing about home warranties, you're probably left wondering how it’s any different than home insurance. The big difference is simply that home warranties provide more coverage options. Homeowners insurance usually just covers what’s in your home, while warranties are more flexible. They can cover your appliances or even things outside your home.

There's also a difference in what situations are covered. Homeowners insurance covers damage caused by catastrophes and emergencies. They help if a fire burns down your house or a tree falls on your roof. If the damage happens due to your own negligence, however — such as accidentally breaking a pipe during a DIY wall demolition — homeowners insurance usually won't help. Meanwhile, home warranties can also offer broader coverage. They may help with stuff that is damaged due to lack of maintenance or general wear and tear.

Water Heater Home Warranty Coverage Options

Since home warranties have so many different coverage options, there are several types of water heater warranties. The first and simplest option is a basic appliance warranty. This coverage is specifically for your water heater, and it usually assists with repair costs. Your water heater might be covered under a general appliance warranty. If your warranty protects all the appliances in your home, it will also cover your water heater. Though less common, it is also possible to find warranty plans that cover all your home systems and appliances. If you get a broad coverage warranty, you’ll want to read the fine print carefully to ensure your water heater is included.

Most home warranties simply provide coverage for repairs. They give you money for the parts and labor needed to fix your water heater. Depending on your specific warranty, it may also cover home damage from problems like a leaking water heater. Replacement is an optional coverage type you may be able to include in your contract. In these sorts of warranties, you get help paying for a brand-new water heater if your old one is beyond repair. Replacement warranties are less likely to cover tankless water heaters due to the higher cost.

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• How Much Does It Cost for a Tankless Water Heater?

How Much Does a Home Warranty Cost?

Most home warranties cost somewhere between $300 and $600 per year. Several things can affect this price. Increased coverage or fewer service calls typically cause your home warranty price to increase. Since a new water heater usually costs somewhere between $400 and $1,600, a home warranty may pay for itself in the event of a broken water heater.

FAQs

Will a Home Warranty Replace the Water Heater?

Whether the home warranty plan will replace a broken water heater will depend on your policy. Some policies only cover repair, while others also cover replacements. If your policy covers replacements, it still may not pay the full amount to replace tankless water heaters or water heaters over 75 gallons in size.

Are Water Heater Repairs Covered by Homeowners Insurance?

The typical homeowners insurance policy does not cover water heater repairs. Your specific policy might cover water damage caused by a leaking water heater, but it usually does not assist you with repairs or replacements.

Are Home Warranties Worth the Money?

The answer to this question depends on what warranty you pick and the condition of your home. As long as you pick a plan tailored to your needs, you may find that it’s worth it. Obviously, you’d save some cash by not purchasing a warranty. But without a warranty in place, you may end up spending what you had saved on unexpected repairs.