It seems that every major utility company is now promoting “service line coverage” as “recommended insurance protection” to their customers. What is this and do you need it?
First, let’s break down what service line coverage is and what it covers. When an EXTERIOR service line such as your water line, sewer line, natural gas, or electrical power line fails, it is typically excluded from your homeowners insurance policy.
Your homeowners policy is designed to cover damage to your home, not damage to your yard or underground service lines. Many times when there is a service line failure, the home itself is not damaged, but the yard is. The cost to dig up the failing service line and repair it can be thousands of dollars.
The cost to insure this exposure is relatively inexpensive and we recommend it. While some of our homeowners insurance companies are now offering to add this coverage to your homeowners policy, many do not. You can check with our team to find out if your insurance company offers this. If not, you can contact your water or gas company and purchase coverage through them.
Here are a few examples of actual service line claims…
A large rock abuts an underground sewer line directly under the insured’s sidewalk prior to entering the home. Years of wear mar the pipe and cause leakage requiring excavation and replacement of the pipe. Total covered loss: $10,000
The underground water pipe from the street to the house exterior cracked as a result of freezing and subsequent thawing. Emergency repairs were performed due to the temperature and final repairs completed later. Total covered loss: $9,500
The natural gas line to the house was damaged during excavation by a contractor. After contacting the gas company, the insured learned that the repair costs were his responsibility. Total covered loss: $4,500
The homeowners discovered the electricity was out in the pool cabana and outdoor patio lighting was not working. The underground electrical wiring running between the house, outdoor patio and the pool cabana was found to be corroded. Part of the pool patio was damaged during excavation and required repairs as well. Total covered loss: $3,800