The short answer
Sudden and accidental discharge from a water heater is a covered peril, so the resulting damage to floors, walls, and contents is paid. The water heater itself is almost never covered, because its failure is wear and tear rather than an insured peril.
Where claims get denied
The dividing line is sudden versus gradual.
- A tank that ruptures: sudden, covered damage.
- A slow drip that rotted the subfloor over months: gradual seepage, excluded.
- A unit past its expected life with visible corrosion: insurers may argue lack of maintenance.
- Mould that developed because the leak was not addressed: usually capped or excluded.
Whether to claim at all
Typical water heater damage runs $2,000–$8,000. With a $1,000–$2,500 deductible and the premium impact of a water claim — which insurers weight heavily — small losses are often better paid out of pocket. Water claims disproportionately affect renewal pricing and insurability.
Run the numbers first
Upload your policy to PolicyPal and we show your deductible, any water sublimit, and an estimate of the renewal impact so you can decide before filing.
Frequently asked
- Does insurance replace the water heater?
- Generally no. A home warranty or the manufacturer's warranty covers the unit; insurance covers what the water damaged.
- Is mould from the leak covered?
- Usually only up to a mould sublimit of $5,000–$10,000, and only if you addressed the leak promptly.
- What if it happened while I was away?
- Extended absence can trigger an unoccupancy clause, commonly after 30–60 days, which can exclude water damage entirely.
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