Is Hot Water a Matter of Life and Death? If Not, Why Are You Insuring Your Water Tank?

I find ads for water heater rentals fascinating. In particular, I believe some ads for water heater tank “insurance” or “maintenance plans” are some of the best fiction currently published today. My grandfather, though a 6th generation Canadian, lived many years without electricity and without hot running water. He didn’t die. He didn’t even suffer much. When did running hot water become a matter of life and death?

Scare Tactics to Try to Sell Water Heater Maintenance and Insurance Plans

Some companies offering these plans like to throw around some very large numbers. I believe the intention is to scare readers into purchasing their insurance or maintenance plans.

Here are some numbers from the Direct Energy Water Heater Rental Page:
Typical Water Heater Repairs
Parts and Labour Costs:

  • Ventor Motor $672.25
  • Gas Valve $697.00


Sounds impressive, right? Imagine if BOTH the motor and the valve went?!

Did you know a brand new full-price 40-gallon 12-year natural gas tank only costs $688?

Also from the Direct Energy Website, I found the cost for two plans that cover (some) repairs and maintenance to water heaters. The plans are primarily geared towards repairs and maintenance of furnace and air conditioner units. They cost $27.45-$38.45 a MONTH.

Home Emergency Insurance Solutions has a plan for only hot water heaters which includes up to $1000 to replace a unit if it cannot be fixed. This plan costs $6.99 a month.

Do You Flush Your Water Heater Tank Regularly?

If you read the service manual for your water heater it will probably say you need to flush the tank on a regular (listed) schedule. This helps to prevent the buildup of deposits of minerals from your water and rust from your tank at the bottom of the tank.

When Do Water Heater Insurance Policies Really Fail?

If you don’t follow the maintenance schedule for your water heater tank, many “insurance” policies will not cover needed repairs.

In fact, if you rent your water tank, you may also have to pay for repairs if you are not following the manual. On the Direct Energy website, the fine print says:
“Some limitations apply in the following circumstances: …if… water heater requires flushing, de-liming or other repairs from hard water conditions, or iv) where venting or piping requires cleaning, repair or replacement. “

Don’t be too sure that your policy will pay for repairs. One of our friends was told because there was calcium buildup in the tank they would have to pay themselves for replacing their rental unit, even though it was 12 years old.

How Critical is Hot Water to Your Daily Existence?

Before paying cold hard cash for hot water insurance, I’d stop and ask myself “How would I manage with no hot running water?”

Yes, we like to take showers and baths, wash our hands in warm water, wash dishes in hot water, and wash some clothes in warm.

Are any of those requirements critical though?

To wash ourselves, we can heat water and add it to cold. Pioneers did it. Pre-1800’s everyone did it. Is it a nuisance and somewhat dangerous? Yes. Is it impossible? No.

Many times in the winter we heated water in a kettle at our cottage and added it to cold water in the sink before washing the dishes. It’s a bit time consuming but it works.
Clothes can be washed at the Laundromat or a friend or relative’s house for a few days until repairs or a replacement can be completed.

Save Your Money: Don’t Insure Your Water Heater

I’d conclude that spending money to insure your water heater is unnecessary. The insurer might refuse to pay if they could claim you overlooked some type of required maintenance. If the repair is high cost, you could just get a new tank and have several to many years of reliable future service.

If you’re really worried, why not put the same $6.99 to $38.45 (taxes not included!) in a bank account ready to use for the eventual replacement of your tank? That $94.78 –   $521.38 per year would add up quickly.

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4 thoughts on “Is Hot Water a Matter of Life and Death? If Not, Why Are You Insuring Your Water Tank?

    • If you do buy a tank consider buying the tank with the longest “warranty” you can afford. Basically most tanks are the same as far as the heating coil, thermocouple, etc, except for the wall thickness and/or number of sacrificial anodes. So it’s worth an extra couple of hundred for a tank that will last years longer.

      I don’t know if they still offer it, but Home Depot had a great warranty that included labour costs. Worth looking into!

  1. No way on the water heater insurance. I don’t insure $1000 purchases. Keep the money and do the research on a water heater that’s built to last instead.

    I believe it’s far better to buy your water heater as well. We still rent ours, haven’t bought one yet for no reason other than proctrastination.

    • It took us a long time to get motivated to replace our water heater, too. When several friends and relatives had their old rental tanks fail and flood their basements within a short period of time, though, we finally got going on it!

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