With most people setting their water heater temperature at 120 degrees, cold winter temperatures force the water heater to work harder. There are steps that can be taken to prevent heater malfunctions. Insulating the pipes feeds the heater with warmer water and it expends less energy heating incoming water. An insulating blanket for the heater keeps water it contains warm. Insulating exposed areas in your home like your basement also protects the heater from cold winter temperatures.