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Water expands when heated and also when freezing. When water is heated, it expands by around 4%. For a full water heater, this is one of the main reasons malfunctions occur—the hot water has nowhere else to go but out. Due to the constant expansion and reduction in volume, it’s recommended (required in most places) that an expansion tank be installed.

Your water heater's age can affect your homeowners' insurance policy. Many policies will ask how old the heater is when you first apply for a policy—and they may make you replace a model that's over 10 years old. 

Even if your policy permits you to have an older heater, it may significantly reduce the amount of protection available. If an older water heater suddenly leaks and causes damage to parts of your home, your policy may not cover it.

Depending on the brand of water heater, you may need to install an expansion tank in order to meet the conditions for warranty coverage. It’s important for consumers to read the fine print of the warranty to see if an expansion tank is necessary. Even if an expansion tank isn’t required for the warranty, it’s usually mandated by building codes—although not for tankless water heaters.

The chemicals in a water softener can wear down the anode rod in the heater and shorten its life span. However, for most people, the benefits of the softener outweigh this potential drawback.

Have a plumber inspect the anode rod annually for damage, as replacing the anode rod is far less expensive than replacing the entire water heater.