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Thanks everyone! And special thanks for Mike for explaining that in detail ... -Izy-

The water heater is connected to the gas furnace ... To replace it, they would need to bring the vent that connects it to the furnace, which is done through another vent ... so that other vent would also need to be brought up to code ... and any other vent that is part of that chain ... resulting in many, many feets of B-vents. Direct Energy would not charge for the new tank ('cause it is a rental) but they would charge labor and parts for upgrading all the vents. And since it is apparently code to have B-vents (a new thing I believe), they cannot proceed without doing that work first. I'm trying to find info to determine whether or not it's true the new code regulation is in effect and therefore the vents must be changed. If the vents do not need to be brought up to code, then I can have the water tank replaced at no cost to me!

My water tank is leaking and flooded my basement. The insurance company has been to the house and are assessing the damage. I called Direct Energy (rental) and they sent someone to determine whether the tank can be fixed or needs to be replaced. The technician indicated that a new tank is indeed required. HOWEVER, he cannot install it until I bring the vents up to code ... apparently, it is now a requirement to upgrade to B-vent. This is going to cost me about $800 in just vents!!! The tank Direct Energy would replace at no cost since it is a rental. I have been researching the code and regulations and it seems that this regulation is not in effect until January, but that could be just my interpretation (and lots of wishful thinking!). Does anyone know anything about this?