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I use the ones like Rick described. I have had trouble with them leaking from the threads of the connection that holds the ball valve together. Brand new valves and they would leak at the initial turn on.
Your concern about the tank splitting on the side is valid but it only takes a drop of water to activate the ball valve. I would rather have it run for a minute or less and finally set the sensor off than have it run all day or longer while you are at work or away.
And yes some that i have installed have prevented catastrophe including a roof leak that dripped in the pan and thus the home owner was alerted when they had no hot water and went to the attic to inspect.
I also sell and give water alarms from Statewide that i put in the water heater and condensate pans and around problematic icemakers. Another property saver, goodwill bringer, money maker item that is cheap, cheap, cheap.
Funny how things are so different in other parts or the country. 95% of the water heaters around here are in basements, the other 5% is maybe slab floors. I have only installed 2 water heaters in attic space, in my career. Thats why the auto shut offs are so popular elsewhere. I appreciate everyones info, and keep it coming. I can see where the wash machine shut off would be a good sell here, lots of 1st and 2nd floor laundry rooms.