A residential water heater is a home system that’s responsible for heating up water for cooking, cleaning, bathing, and space heating. If your system fails, a home warranty can protect against the unforeseen costs caused by a breakdown.

In this review, the This Old House Reviews Team will discuss the importance of protecting your water heater, how to find the best water heater warranty, and which home warranty providers offer this type of coverage.

Cost Breakdown of Common Water Heater Repairs

If your water heater unexpectedly breaks down, a home warranty can save you money on costly repairs or an entire system replacement. Below are some of the most common causes of water heater breakdowns, what can be done to resolve the issue, and the average cost of related repairs and maintenance.

Malfunction

Solution

Average Cost

The pilot light will not ignite on gas heaters

Replace the valve or thermocouple

$45 to $150 per hour

Your water has a rusty color and a strange odor or taste

The anode rod may have extensive corrosion and requires replacement

$20 to $50 per hour, plus labor costs

The water in your home won’t heat to the specified temperature

It’s possible that the dip tube is broken and needs to be replaced

$150 per hour, plus replacement parts cost

Lifespan of Water Heaters

The International Association of Certified Home Inspectors states that tankless water heaters typically last for 10 years, while conventional systems degrade between six and 12 years. If you don’t have a water heater warranty when your system starts to fail, you could be out hundreds of dollars on necessary repairs and replacements.

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Water Heater Warranty vs. Home Warranty

Most manufacturers include a water heater warranty whenever you purchase a new system. In most cases, you’ll have to register your system’s serial number (found in your warranty information packet) within 30 days after installation to receive coverage. This may cause problems for homeowners who inherited a water heater after buying a home if the previous owner didn’t correctly register the unit.

Additionally, 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.

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.

Read more: What Is a Home Warranty?

Making a Claim with a Manufacturer’s Warranty vs. Home Warranty

To request service under a manufacturer’s warranty, the policyholder must locate a licensed dealer in their area. 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.

On the contrary, 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 accepted, the provider will generally dispatch a technician within 48 hours.

Cost Difference Between Manufacturer Warranties and Home Warranties

On average, a home warranty costs around $300 per year for basic protection and $600 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–$125 per claim.

Water heater warranty costs will differ dramatically between manufacturers and vendors. For instance, Home Depot offers a five-year warranty for $69 on systems that are purchased from the store. Rheem also provides an extended water heater warranty for $115 when the installer uses an upgrade kit during installation.

Best Water Heater Warranty Providers

Of all the home warranty providers in the industry, the following three are the best for offering water heater protection.

Provider

American Home Shield

Choice Home Warranty

Select Home Warranty

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Water heater coverage

Covered under ShieldPlatinum™, ShieldGold™, and ShieldSilver™

Covered under Basic Plan and Total Plan

Covered under Gold Care and Platinum Care

Monthly premiums

$40–$58

$36–$44

$36–$38

Service fees

$75–$125

$60–$85

$75

American Home Shield (AHS) offers extensive coverage for water heaters and other home systems and appliances. In addition to its affordable coverage, American Home Shield stands apart as our preferred provider for the following reasons:

  • Covers 49 states (all but Alaska)
  • Has a claims center that’s open 24/7/365
  • Provides generous coverage caps
  • Responds to service requests within 48 hours, 98% of the time
  • Allows policyholders to select service fees of $75, $100, or $125—a higher fee results in lower monthly payments
  • Boasts a B rating from the Better Business Bureau (BBB)

To receive a personalized quote from American Home Shield, simply fill out this online form or you can discuss the policy’s terms with a customer service expert by calling 844-529-9298.

Frequently Asked Questions

Our Rating Methodology

The This Old House Reviews Team is committed to providing comprehensive and unbiased reviews to our readers, and we aim to provide transparency in our review standards and research process.

Our research process includes speaking with representatives from more than 40 home warranty providers, requesting quotes, and asking clarifying questions to gain insight into each provider’s benefits and downsides. We also analyze sample contracts from each company to understand specific coverage terms.

To rate companies, we apply the data we have gathered to our review standards. These standards are on a 100-point scoring system, which is detailed below:

  • Coverage (35 points): Providers are scored based on breadth and depth of coverage. We focused on key home systems (HVAC, plumbing, and electrical), essential appliances (refrigerator, ovens, and laundry machines), and unique coverage items (such as roof-leak coverage and code violation allowances). Coverage scores are weighted by taking into account coverage caps and other limiting factors, meaning providers with greater range of coverage and higher coverage caps score the highest.
  • Value (30 points): A company’s plan value is a reflection of how well it serves the customer in comparison to what the customer pays for the policy. We accounted for monthly costs, service call fees, and cost flexibility (such as customizable service call fees, discounts, and multi-year policies).
  • Trustworthiness and Transparency (21 points): Trustworthiness and transparency are a reflection of how well the provider considers the customer’s interests. We scored items such as the length of workmanship guarantees, online availability of a sample contract, policy change flexibility, and ease of cancellation. Additionally, we scored items that reflect industry reputation and customer satisfaction, including analyzing brand reputation across the Better Business Bureau and third-party customer review aggregators.
  • Availability and Service (14 points): Quality of customer service is key to customer satisfaction. We dug into each provider’s guaranteed response times, claims processes, service flexibility, emergency availability, and more.

To share feedback or ask a question about this article, send a note to our Reviews Team at reviews@thisoldhousereviews.com.