Summary: While home insurance may cover damage caused by your water heater and its replacement, you’ll need to meet certain criteria and have the right coverage in place for protection. Many water heaters can benefit from appliance insurance, also known as a home warranty. There is also coverage available for oil tank leakage, however, you must add a specific endorsement and have an inspection certificate to do so. Estimated Read Time: 3 mins
If you have a standard home insurance (HO3) policy, your water heater may be covered and damage that has occurred because of the water heater may be covered, however, only if you meet the following criteria:
- In order to have personal property and/or your home’s structure repaired by insurance, your water heater must have been maintained.
- Furthermore, the leak must have been sudden and accidental. General wear and tear is not covered.
- Finally, in order to cover the damage to your water heater itself, you must meet the criteria above as well as have added an equipment breakdown coverage endorsement to your policy.
In the event the damage from your water heater is so severe that your home becomes uninhabitable, your homeowners insurance will also provide reimbursement for meals and lodging through its loss-of-use coverage.
Keep in mind that your policy has limits and while you use your coverage to pay for meals and hotels, don’t expect a champagne and caviar diet to be covered.
If you have more expensive personal belongings, such as art or designer clothing, you’ll likely need an endorsement as home insurance policies also have limits for personal property coverage.
Water Damage Can Be Tricky
Water damage isn’t usually covered by a standard home insurance policy unless it’s a sudden accident.
It’s important to check your policy details and talk to your insurance agent, who can help you understand what situations are covered and what steps you need to take if you experience accidental water damage.
In many cases, having home warranties or a warranty on specific appliances within your home is also beneficial for covering water heaters themselves.
Appliance Insurance
Also known as home warranties, appliance insurance is a great way to protect your home’s water heater, along with many other appliances.
Unlike home insurance, a home warranty is going to help you replace things like a water heater in your home when they stop working due to general wear and tear.
Appliances and machinery eventually fail over time. Having appliance insurance will protect for when that day comes.
On the other hand, homeowners insurance is there for you to protect against things that might happen, such as a malfunction or damage from a windstorm.
Neither can fully replace the other and both can be used to better protect homeowners in Texas from covering sudden, expensive losses out of pocket.
Home Heating Oil Tank Insurance Coverage
Home heating fuel oil spill or leak is only covered if it’s caused by something like a fire or lightning strike that your homeowners insurance covers.
If the tank leaks on its own, the damage isn’t covered, so reimbursement will depend on whether or not the leak is due to a peril covered by your policy.
You can add coverage for your oil tank with an escaped liquid fuel endorsement or oil remediation insurance.
This add-on helps cover costs from oil leaks or spills, which can cause fires and environmental hazards like ground contamination.
Keep in mind that oil damage risks can be expensive and widespread, including the following:
- Soil or water contamination
- The increased risk of fire
- Paying for cleanup (on average, between $100,000 and $200,000)
- Health risks
Adding an escaped liquid fuel endorsement can help you cover damages, pay for clean-up, and restore your damaged oil tank, however, policy limits will apply.
You can find home heating oil tank insurance coverage for typically $50 to $75 per year, making it very affordable, however, you’ll need to check and compare policies and carriers to find the best rate.
Furthermore, to get coverage, you will need to obtain an inspection certificate.
An oil technician must certify the system is up to date and the tank-to-furnace line is safely enclosed.
If you are concerned about covering your water heater, or oil tank, or simply looking for more coverage, contact us at the number above to compare top-rated coverage from trusted insurance companies in Texas.
Sources:
1. Are Home Warranties Worth It?, Forbes. Accessed July 2024. https://www.forbes.com/home-improvement/home-warranty/are-home-warranties-worth-it/