Many water utilities offer price caps to reassure consumers about future prices. Researchers have focused largely on the implication of price caps on total cost of ownership or conservation rather than consumers’ preference for such guarantees. In this paper, we examine consumers’ preferences for price caps. We first consider how consumers form expectations about their water prices, and secondly how they evaluate those expected prices against guarantees. Our empirical investigation, using new survey data, confirms that as variability of historic prices increases, consumers use less historic information to form their expectations, and replace it with more subjective information, such as their perceptions of the water supplier’s investment efficiency and the quality of their water. Further, water consumers who are more motivated to protect themselves, as demonstrated by averting behaviours even when they consider service quality to be good, more strongly prefer a guarantee when past prices have been highly variable.