Does Homeowners Insurance Cover Hot Water Heater? 
Typically a water heater will be covered if there is damage from a source OTHER than wear and tear or flood . The damage resulting from a water heater leak is generally covered . The one exception will be mold that forms away from the original water damage sight , if the mold becomes airborne . I would check with your local independent agent to make sure the company he/she selects for you has water damage coverage limits sufficient enough to cover a claim should it arise . Here in NC there are sub-limits to water damage claims . 