Digging In To Service Line Coverage
Most homeowners are well aware that they are financially responsible for anything that happens to their own home and personal property. Since owning a home is a large investment — most homeowners purchase homeowner's insurance to help protect their most important and expensive asset.
However, did you know that you’re also responsible for all the underground service and utility lines that run underneath your property up to where your property line meets the city line? As the homeowner, you are responsible for everything from the cable lines to water piping to power lines that connect your home to the outside world. That’s why, before you move in, you likely had a home inspection done to ensure that all of the existing utility lines are intact and functioning property. But it’s also why you may contemplate adding service line coverage onto your homeowner's insurance policy.
While your homeowner's insurance may cover costly cleanup and repairs related to ruptured plumbing inside your home, it typically does not cover damage to service lines that are running underneath your property. Thankfully, some home insurance companies have started to offer a service line coverage endorsement that you can add onto your homeowner's insurance policy. You may have the option of purchasing a service warranty with your local utility company. However, normally a service line coverage endorsement is a lower cost option and less hassle than dealing with your utility company.
How does Service Line Coverage Work?
As the homeowner, you’re on the hook financially for any service lines or pipes running throughout your property. For instance, if your water pipes crack or your power line is severed, it’s your responsibility to fix. A traditional homeowners policy won’t typically cover broken service or utility lines, but you thankfully have an option to cover these potentially expensive home maintenance issues.
One option is to opt into a “service plan” with your utility company, which is essentially a warranty that covers repairs to and damages from water and sewer lines. The cost of the warranty is then added onto your monthly utility bill. Your electric and cable companies may offer their own similar service programs.
Your other option is to add a service line coverage endorsement onto your homeowner's insurance policy. Service line coverage is a better option than service warranties in large part because it covers all of your utility lines, so you don’t have to buy multiple service plans with multiple utilities. Some utility lines typically covered by service line coverage include:
Water pipes
Steam Pipes
Sewer Pipes
Drain Pipes
Power Lines
Fiber Optics
Cable Lines
Internet Lines
Natural Gas Pipes
In the event of a line or pipe leak or break or rupture, service line coverage will generally cover the costs of repairing or replacing the line as well as the excavation and landscape restoration after necessary repairs are complete.
Among the home insurance companies that provide service line coverage, you’ll generally see it offered in amounts of $10,000 and $20,000, although higher and lower coverage amounts may also be an option depending on the carrier.
What is typically covered by service line coverage?
Here are some examples of damage that’s covered by service line coverage:
Wear & Tear
Rust, Corrosion, Decay, and Deterioration
Mechanical Breakdown
Electrical Breakdown
Tree or root-caused damage
Vermin, insects, or rodent damage
Weight of equipment vehicles, or people
Collapse
Keep in mind that service line coverage endorsement isn’t the same across the board and will vary from company to company and state to state.
How You Might Be At Risk?
Here are some examples of damage that are covered by service line coverage:
A tree root intrusion cracked a sewer line outside a home, and landscaping was damaged while accessing and repairing the leaking pipe; coverage for the line repair and damaged landscaping: $7,650
Over a holiday weekend, a homeowner smelled gas fumes, and the gas company traced the fumes to the incoming gas line from the street to the home; the line needed to be replaced, and an emergency service repair was needed to expedite permanent repairs; coverage for the repairs and the additional expediting expense: $10,000
An underground power line that supplies power to a 45-year-old residence shorted out due to corrosion and required excavation and replacement; total cost: $5,934
The underground water line from a 39-year-old home froze and burst as a result of the impact on flow, and emergency excavation and pipe repair were needed; total cost: $8,200
A buried power line on a homeowner’s premises was damaged due to artificially generated current and had to be replaced; the home was not habitable, and the family needed to stay in a hotel during repairs; the hotel stay was covered along with the replacement of the damaged line; paid loss after deductible: $2,500
Is service line coverage worth it?
If your home insurance company offers service line coverage, you should absolutely consider it as an add-on to your homeowners insurance policy. From a value standpoint, there are very few endorsements that top service line coverage.
On a 60-year old home, Travelers Insurance, for example, offers $20,000 of service line coverage for about an $80 annual cost which also includes $50,000 of Equipment Breakdown Insurance. For newer homes, the annual cost could even be lower. Considering that service line ruptures can cost around $2,500 on average, this endorsement is an absolute steal. If you live in an older home, service line coverage is a no-brainer. To learn more about your Service Line Endorsement options, give Selby Insurance and Financial a call at (870) 336-2121 or email tobyselby@selbyinsurance.com. Stop by and see us anytime in Jonesboro at 2216 Wilkins Avenue. Follow us on Facebook at Selby Insurance.
