A residential water heater is a home system that’s responsible for heating water for cooking, cleaning, bathing, and space heating. If your system fails, you could be without hot water—but a home warranty can protect against the unforeseen costs of a water heater breakdown caused by wear and tear.
In this review, we’ll discuss the importance of protecting your water heater, how to find the best water heater warranty, and which of our highest recommended home warranty providers offer this type of coverage.
Note: Cost data sourced from Angi
Types of Water Heaters
There are several types of water heaters, and each functions differently. Here’s a breakdown of the most common models along with their typical lifespans:
- Storage tank water heaters: These are the most traditional water heaters, storing and heating water in a reservoir. They typically last eight to 12 years, though regular maintenance like flushing sediment can extend their life and improve efficiency.
- Tankless water heaters: Also called on-demand heaters, these systems heat water directly without a storage tank. Although they come with higher upfront costs, they last 15–20 years and are ideal for households that want continuous hot water with improved energy savings.
- Heat pump water heaters: These heaters use ambient heat from the air to warm water slowly and efficiently. Depending on the model and how consistently maintenance tasks like filter cleaning are performed, their lifespan ranges from 10 to 20 years.
- Indirect water heaters: These systems rely on a home’s boiler or furnace to heat water through a heat exchanger. They can last 15–20 years, assuming the connected boiler is also properly maintained.
Hard water, lack of maintenance, and frequent high-demand usage can significantly shorten a water heater’s life span. As a unit approaches the end of its service life, signs of aging may include inconsistent water temperature, unusual noises, sulfur smells, or discolored water.
Cost Breakdown of Common Water Heater Repairs
Even the best water heaters can fail due to normal wear and tear, and repair costs can add up quickly. A home warranty can help offset these expenses by covering parts and labor for many common issues. Below is a breakdown of typical water heater issues, recommended solutions, and estimated repair costs.
| Issue | Potential Fixes | Estimated Repair Costs |
|---|---|---|
| Pilot light won’t ignite (gas units) | Inspect and clean or replace pilot assembly | $50–$150 |
| Water has rust, odor, or strange taste | Replace corroded anode rod | $20–$75 |
| Water doesn’t heat to set temperature | Replace broken dip tube | $25 |
| Water heater is leaking | Replace drain valve or pressure relief valve, or full unit replacement if leaking from the tank | $100–$1,000+ |
| Strange noises (popping or rumbling) | Flush tank to remove sediment | $80–$200 |
| Water takes too long to reheat | Replace heating element or thermostat | $100–$300 |
| No hot water (electric units) | Replace faulty heating element or thermostat | $150–$300 |
| Temperature is too hot | Adjust or replace thermostat | $75–$150 |
| Low hot water pressure | Flush sediment or replace shutoff valve | $100–$300 |
The cost to replace a water heater varies based on the type and size of the system. The average cost to install a new water heater is around $1,300, with typical ranges between $875 and $1,750. Tankless water heaters can be more expensive to install, with costs reaching up to $3,500 due to more complex installation requirements.
Without a water heater warranty, homeowners are responsible for these replacement costs and any associated repairs. A warranty can help mitigate unexpected expenses and ensure timely service when issues arise.
Water Heater Warranty vs. Home Warranty
Most manufacturers include a water heater warranty whenever you purchase a new system. You’ll often have to register your system’s serial number, which is found in your warranty information packet, within 30 days after installation to receive coverage. This may cause problems for homeowners who purchase a home containing a water heater that the previous owner didn’t correctly register.
Once the manufacturer’s warranty expires, homeowners face the risk of paying for repair or replacement costs completely out of pocket; this can become expensive, as water heater installation costs can range from hundreds to thousands of dollars. Sometimes, a manufacturer will offer an extended coverage plan to lengthen a warranty. However, this extended protection may not cover both parts and labor for repairs or replacements. Additionally, manufacturers’ warranties typically only cover defects, not damage sustained in the course of using the water heater.
To guarantee that the essential parts of your system are protected, consider investing in a home warranty. A home warranty is an annual service contract that protects major systems and appliances in your home, including your water heater, whenever they break down due to normal wear and tear. Note that home warranties don’t typically cover damage from rust, corrosion, or sediment.
Making a Claim with a Manufacturer’s Warranty vs. Home Warranty
The policyholder must locate a licensed dealer in their area to request service under a manufacturer’s warranty. While most qualified technicians can repair a water heater, many manufacturers limit who can perform the work. If there’s not an approved repair technician in your area who can tackle the necessary repairs, you may experience delays in resolving the issue.
However, most home warranty companies have a dedicated network of experts who are qualified to repair water heaters and other covered home systems and appliances. After a claim is filed, the provider will generally respond within 48 hours.
Cost Difference Between Manufacturer Warranties and Home Warranties
On average, a home warranty costs around $564 per year for basic protection and $984 per year for more comprehensive packages. Homeowners are also responsible for paying a service trade fee to a technician once they arrive to diagnose or make a repair. These fees generally range between $75 and $125 per service visit.
Water heater warranty costs can vary significantly between manufacturers and vendors. For example, The Home Depot offers a $69 5-Year Water Heater and Water Softener Protection Plan, which provides additional coverage beyond the manufacturer’s warranty.
Best Water Heater Warranty Providers
American Home Shield offers extensive coverage for water heaters and other home systems and appliances. In addition to its affordable coverage, American Home Shield offers the following key features:
- Doesn’t impose a coverage cap on electrical and plumbing systems, which includes water heaters
- Offers up to $4,000 for home appliances and $5,000 for other major systems
- Covers rust, corrosion, and sediment damage
- Responds to service requests within 48 hours
- Includes flexible service fees of $100 or $125
FAQs About the Best Water Heater Warranty
What does a water heater warranty typically cover?
A typical water heater warranty covers defects in materials or workmanship, such as tank leaks, heating elements, thermostats, and pressure relief valves. However, most warranties exclude labor costs, sediment buildup, and damage from improper installation or lack of maintenance. Extended warranties may offer broader coverage, so it’s important to review the terms carefully.
What’s the difference between a gas and an electric water heater?
The primary differences between gas and electric water heaters, other than the fuel source, are the heating components. A gas unit includes its thermostat on the control valve, while electric models feature a separate temperature controller. Gas water heaters are also equipped with safety features like a heat-limiting device to prevent overheating and a thermocouple to disconnect the fuel during an emergency.
Which water heater is best for my home?
The type of water heater that makes the most sense for your home largely depends on the space you have. For instance, a tankless model has a much smaller footprint and is ideal for small, single-family homes as opposed to a unit with a large storage tank.
Our Rating Methodology
We developed a comprehensive rating methodology to evaluate home warranty companies. Our process included speaking with company representatives, gathering quotes, analyzing sample contracts, and conducting homeowner surveys and focus groups. We also tested the sign-up and claims process for 11 top providers and performed secret shopping to assess the customer experience.
Using this data, we rated each company based on six key factors essential for choosing a home warranty. Each provider received a score out of 100, which we converted into a 5-star rating.
Breakdown of Our Weighted Factors:
- Coverage: We examined how comprehensive each provider’s coverage was, including whether plans covered unique items. Companies with broader coverage and higher annual limits received higher scores, while those with long waiting periods or depreciation policies lost points.
- Cost: We analyzed average monthly fees and service call costs. Providers with prices at or below industry averages, no extra fees, and no hidden surcharges scored higher.
- Trustworthiness: To gauge reliability, we reviewed customer ratings from sites such as the Better Business Bureau and Trustpilot and checked for National Home Service Contract Association (NHSCA) membership. Companies with strong customer reviews, long workmanship guarantees, and no major legal issues earned more points.
- Plan transparency: We evaluated how clearly each provider outlined its terms, policies, and exclusions in contracts and on its website. Companies with well-documented and easily accessible coverage details received higher scores.
- Customer support: We assessed responsiveness, claims-filing options, and overall service quality. Companies offering multiple contact methods, quick response times, and effective customer support ranked higher.
- Flexibility: We awarded more points to providers that offered various plan options, extensive add-ons, the ability to choose a technician, and customer-friendly cancellation policies.
