The statistics related to water heater failure reflect the importance of upgrading before wear and tear renders a heater obsolete. Research collected by the The Insurance Institute of Business and Home Safety reveals that nearly 70 percent of water tank failures are caused by leaks. Over 30 percent of water heater failures were reportedly related to the age of the appliance and 95 percent of those failures were caused by heaters that were in use for over 20 years. The average water heater failure will cost a household up to $4,444 so it pays to switch out water heaters before a replacement is necessary.

Hints of corrosion
The California Urban Water Conservation Council recommends that homeowners pay special attention to signs of leaking from their water heater. Leaks often start at the bottom of a heater's water tank, and leaks in this location are generally caused by corrosion. If corrosion has begun, then the deterioration of the tank will continue until a rupture is inevitable. Homeowners can catch corrosion before a link occurs by checking the status of mineral buildup within the tank. Metallic-tasting water or visible sediment are clear warning signs that the inside of your tank has begun to deteriorate, warns San Francisco Gate. Consider a tankless water heater for replacement if mineral buildup has become a repeat issue for your household. Tankless models are designed to flush minerals and resist corrosion. 

Declining efficiency
The presence of metallic minerals and aging components will lead to the declining performance of a traditional water heater. Storage tank water heaters are only 65 percent efficient when it comes to heat transference. Much of the energy spent heating up water in a storage tank is immediately lost to the surrounding environment. As a result, homeowners running an underperforming heater are vulnerable to significant energy waste.  Tankless water heaters, on the other hand, are 99 percent efficient at transferring heat. The money saved by the efficient tankless heaters alone is enough to convince many homeowners to replace their storage tank model.

Insufficient Space
Storage tank water heaters take up quite a bit of space wherever they happen to be installed. The cumbersome size of storage tanks can be circumvented by purchasing a tankless water heater. In fact, the right tankless models are up to 90 percent smaller than storage tank counterparts. Homeowners can select the most space-efficient model by discussing their home's heating demands with a certified contractor.