Should I turn off the heater or just the water?
Turn off the cold water supply to the heater and the power or the gas to it, in that order, as soon as it can be done safely. A heater that is still heating while it is leaking can be damaged, and the water supply stops more water entering the tank.
The cold water shutoff is usually on the pipe that feeds the heater, and it can be turned clockwise to close. Turning off the power at the panel is safer than standing at an electric heater with wet hands. For a gas heater, the gas shutoff is at the appliance or the valve on the gas line, and the call taker can explain how to use it.
Leave the heater off until a plumber has checked it. A heater that has been drained or shut off for a long time can be restarted once the leak is repaired, and the plumber will say whether it is safe to do so.
Why does water behind a water heater go unnoticed for so long?
Water behind a water heater runs down the back of the tank and along the wall and the floor, and it is hidden in the closet or the garage where few people look. The wall and the framing can stay wet for weeks before a stain or a soft spot appears on the surface.
The water heater's base is often pressed against the wall with little room to see behind. The leak can start as a drip that a homeowner does not notice, and the moisture then wicks into the drywall and the bottom plate.
A closet with a heater is also a place that is rarely opened, so the damage builds quietly. A regular look at the floor and the wall behind the tank, and a check after any storm or cold snap, can catch a leak before it reaches the framing.
What should the wall behind the heater look like after the job?
The wall should be dry to the goal set at the start, with the drywall replaced where it was removed and the framing sound. The technician records the readings for the cavity and the bottom plate, so the repair can be done on dry materials.
A wall that has been opened for drying is closed only after the readings show the framing is dry. Closing it sooner traps moisture and can start mold growth where no one can see it. The drywall is replaced by the trade that does that work.
Ask for the readings and the photographs of the cavity before the wall is closed. They show what was dried and what was removed, and they are the record an insurer or a later buyer will ask for.
Will a water heater leak be covered by my policy?
This site cannot say what a policy covers. A policy generally responds differently to a sudden failure than to a leak that developed over time, and many policies treat wear and maintenance differently from a fault. Keep the photographs and the record and ask the insurer.
The cause of the leak decides a lot of the answer. A tank that failed suddenly, a fitting that let go under pressure and a drip that ran for months are different events, and an insurer may look at each in a different way. The technician records the source and the time the leak was found, where that can be known.
The decision belongs to the insurer and the policy, not to the technician or to this site. The record of the water path, the drying and the removal is the evidence the insurer will ask to see.
What does a water heater leak repair cost?
This site does not publish prices. The cost of the water damage work moves with how much of the wall and floor is wet, how many materials must be opened and how long the drying runs. The heater repair or replacement is a plumber's price, and it is quoted by the plumber.
The drying and the removal are scoped on site and approved before any work starts. The heater itself is a separate job, quoted by the plumber after the leak is confirmed, and a new heater is priced for its size and type.
Ask for both scopes in writing so that the damage and the appliance can be compared separately. That keeps the insurance claim, the repair and the drying in their own lines.