Our house was struck by lightning. We have two water heaters that were damaged. The water heaters had 10 year warranties and were 18 months old. According to the Rheem warranty, lightning strikes void the warranty. The insurance company wants to repair the units. If this is allowed we will no longer have any warranty on the water heaters. Can they be allowed to do this or do they have to replace them?
From your question, I can’t tell how badly damaged the water heaters are. However, if it is clear that lightning caused the damage and you will lose the warranty, then the insurance company should pay to replace them. The insurance company would then be entitled to take the damaged water heaters as “salvage” if they choose to.
Warranties should be considered in the evaluation of the damage. If the warranty can’t be reinstated, then the insurance company has not put you back in the same position you were in before the loss, which is their minimum obligation to you. In such a case, they would owe to replace the water heaters with new ones, warranty included. That’s the benefit of replacement cost coverage, which allows for “betterment” when repairs will not return you to pre-loss condition.