Is a Hot Water Heater Covered Under Insurance, or Will You Be Forced to Pay for Damages?

As more and more homeowners start turning their unfinished basements into cozy rooms for everyone to enjoy, the worry that something could ruin it is bound to increase.

Water damage is something everyone thinks about and wants to be protected from. In fact, according to the Canadian Institute of Actuaries, approximately 48% of all home insurance claims are water damage related.

It makes sense that when you start investing a lot of money into your basement – you want to make sure you’re protected from all possible sources of damage, including your water tank.

So is a hot water heater covered under insurance? The answer may not be what you think.

Damage Caused by a Water Heater 10 Years or Older May Not Be Covered

Under most default insurance policies, water damage caused by a water heater may not be covered if the tank is over a certain age – typically 10 years old. It’s important to check with your insurance provider to be sure.

Why? Hot water tanks last between 8-12 years with the proper care, so many Canadian insurance companies do not see the failing of an old water heater as a covered incident, but rather an avoidable one that is the homeowner’s responsibility.

Homeowners are expected to maintain their water heater as they are with other parts of their home, like the roof. “A home insurance policy is not a maintenance policy,” says Insurance Bureau of Canada’s Pete Karageorgos. This means you could be on the hook for all repair and replacement costs.

Please note: With some policies, the damage to your basement may be covered, but not the replacement costs. Please check with your insurance provider.

Water Heaters Can Cause Serious – and Expensive – Damage If Not Maintained

In the case of hot water tanks, the source of a flood is most often at the bottom. As it ages, the bottom of the tank will rust away, eventually falling right off in many cases. Water gushes out all over your basement, and unless the main floor drain is nearby and unobstructed, the basement floods.

When you discover it and shut off the water valve, you’re left with a sopping mess of a basement that has varying degrees of damage that could become very expensive. That’s not including the cost of replacing your water heater and the inconvenience of no hot water that could go on for days.

What About Young Water Heaters?

So an old water heater is most likely not covered, but what about young ones? If it’s only 2 years old and springs a leak, what then?

Water damage insurance coverage is often dependent on your individual policy. In some low-cost policies, no water damage is included at all. So while your warranty may cover the repairs we do to your water tank, unless it is specifically added to your policy, the damage will be paid for out of your pocket.

Check With Your Insurance Provider, and Have Your Water Heater Inspected

There are two things to do to reduce the risk of a messy and expensive situation. You should check your coverage with your insurance provider, and you should have your water heater inspected.

If you want to make sure water damage is included on your insurance policy, you may have to purchase add-ons to your original policy. In the meantime, we offer water heater tune ups and inspections that will catch any potential problems, and actually increase the efficiency of your water heater.

If your water heater is approaching ripe old age, we also do installations of top brands with excellent warranties. Once they’re installed, get some peace of mind with our VIP program, which will always put you and your maintenance needs first.

Come Check My Water Heater Before My Basement Floods