Would renters insurance cover a ruptured hot water heater?

Yes, but only for the dwelling, not for your renter's belongings. be sure to notify your insurance company that you have renters, your rate will go down because they're not insuring your belongings...and be sure to tell your renters about renters insurance. It should. Read your policy for coverage and see if there is a clause of replacements of items in which way they get damaged. I dont think water damage should be covered any differently then fire damage. The item is damaged and needs to be replaced. You can call your agent and ask them they should be able to tell you positively.