Water and Sewer Line Insurance. Do I need this?

[lt.jrichey]

Insurance for water main breakage.

My water company periodically sends me a dire-sounding notice about how the water and sewer lines on my property are my responsibility if anything goes wrong. Of course, they are trying to get me to buy insurance for $12/month to cover costs if a water pipe bursts or a sewer line gets blocked.

Is this something I really need to be concerned about? If so, is $12/month an economical way to insure these lines or is there a better way to go about it?

The insurance information for coverage is not being sent directly from the water company. I was just advised that we (the homeowner) are responsible from the meter all the way to the foundation of our home. I imediately called my insurance office and asked if this area was covered under my homeowners insurance? NO! And there was no information on some private insurance company that does. I then called the Indianapolis Water Co. They had no information on a company that provided insurance to cover this area. Now there may be a loop hole in your homeowners policy, lets say that a tree that you have planted near the main has a strong root system and has grown near to and in this case grown right through the pipe resulting in the main breaking. Would this be any different than one of your trees falling into your home, your car, and/or your neighbors stuff. In this case (of a tree falling) your insurance does cover the damage made by/from the tree. I believe the same coverage could be expected from the roots causing the damage. To be sure I have left this detailed question with my insurance Rep. and our family attorney.

[lt.jrichey]

I will post their response to my question.

[LuckyRobin]

My mother just had to pay $4000 to have a break in the line fixed a couple of months ago. It involved breaking up the asphalt driveway, a bulldozer digging down 12 feet and looking for a break along 200 feet of piping (fortunately they found it in the first 50 feet), then replacing the broken piping that was full of roots from a vining plant she'd planted above the line years ago. She also lost some very expensive heirloom rose bushes which are pretty much irreplaceable. If she decides to repave that part of the driveway it'll cost an additional $1000. If you have plenty of money in your emergency fund I see no need for this kind of insurance. But if you don't it might be worthwhile, especially if the house is set well back from the road like my mother's.

[SnoopyCool]

DH recently replaced our lines coming from the house to the main. Cheap fix for him, but he knows how to do it, was licensed at the time, and it wasn't 12' down under asphalt. Do you know much about where your line runs in/out and under what conditions would it take to replace/repair? I, too, think $12/mo is steep, but that would depend on when something needs replacing and how expensive it is to do it. Does that insurance also cover any water damage to your home if a pipe bursts? That might make it worth it if you can avert using homeowner's, especially if the cost of repairs is high.

[Bob B.]

I know that the previous owners of our house paid ~$10,000 to have the sewer line on their property cleaned, shortly before we moved in. Tree roots had created a blockage.

[Thrif-t]

We have the sewer line replacement insurance thru our natural gas co in OH. It is $3/mo plus I pay another 3.75 to have my yard and drive way (sewer line runs under concrete drive) put back together if they'd have to replace the line. But we know we will eventually need this, We have oak & maple trees in our front yard that the roots get into the line. When we first moved in it clogged all the time and backed up yuck! We'd get the line snaked and it'd be good for a year. Finally we had the line scoped with a camera and found a crack in the pipe and had 6 ft of the line replaced right where it came out of the house($900 in 1996). Was good for 12 years and then started w/the clogs again. But we have gotten smarter as soon as the wash bubbles start coming up the drain we know we have clog and call to get snaked so we don't have the sewer backup. Insurance pays for the snake so its worth it to us. We pay 81/yr and a snake call could cost that much or more if its an emergency over a holiday or weekend..which tends to be when it happens So for us it pays for itself. Oh and insurance won't replace the line until we have 3 backups in a 12 mo period. So far its been 1 a year usually around thanksgiving. Our house is 41 years old and the pipe is like that terracota stuff, the part we replaced is pvc.

[Frugal]

I have never heard of this kind of insurance before. Is this common?

[snafu]

I suspect the need for specialized insurance is very much tied to your particular circumstances. $12. per month - $144. annually sounds expensive. What trees are on or adjacent to your property? Have any of your neighbors had sewer line backup problems? Read your home insurance contract carefully to identify whether there is any coverage for water/sewer-line damage. [The law says insurance contracts must be written in plain English]. I suggest asking your agent if the carrier sells this type of insurance as an add-on/rider and rate. Ask e-pinions site for feedback.

[nick__45]

My water company periodically sends me a dire-sounding notice about how the water and sewer lines on my property are my responsibility if anything goes wrong. Of course, they are trying to get me to buy insurance for $12/month to cover costs if a water pipe bursts or a sewer line gets blocked.

Is this something I really need to be concerned about? If so, is $12/month an economical way to insure these lines or is there a better way to go about it?

There is an item listed as part of the admin cost within my bill to cover that. My water/sewer bill is usually 23 dollars and only 3-5 dollars is actually usage while the rest are fees and taxes; one of which is a administrative fee that covers maintenance. The reason I know this is so because the administrative fees goes up as usage goes up; therefore, it is not just to cover paperwork as that would not be associated with usage amount. Basically, people who use more water pays more for sewer as well as maintenance fee of such lines.

Of course, this is on top of what my property tax covers. Therefore, I am clueless of why there is such a insurance that you have to buy. Since it's only 12 dollars, I figure this is probably a ploy to get people to pay extra for the service. People usually don't look at their water bills the way they do with their electric bill and such small fees are a great way to raise cost without complaints. For my electric bill, there are also a lot of maintenance fees labeled as taxes and administrative cost. Basically, I won't have to stuck with preparing my own power line.

[Robert742]

Here is some input based on my experience working in insurance:

As DisneySteve knows well, it is best not to file homeowners insurance claims and to keep the insurance for catastrophic coverage.

More than one claim every 5 years is considered a high frequency of claims. You may pay more in insurance premiums over 5 years than the cost of 2 small claims, but when you consider claims processing expenses, as well other people's small claims, and other administrative costs to sell you and service your policy, and huge claims costs from hurricanes, tornadoes, wildfires, and other sizable losses, insurance companies want to avoid customers filing claims. There are a lot of people who never file a homeowners claim, and insurance companies would prefer to insure them, and avoid frequent claims filers.

Some insurance companies surcharge you for claims, so they are less likely to use the 2 claims in 5 years non-renewal guideline. Some insurance companies allow you to buy a guarantee you will not be non-renewed for claims.

I know it is not your fault if your house is damaged 2 years in a row if we have 2 back-to-back severe hurricane seasons, but it is best to do whatever you can to maintain your home and take steps to avoid or reduce the chance or amount of a possible claim. If you have weather losses, you are not the problem, it is where you live -- even so, the insurance company wants to avoid it.

Many insurance companies pay out more in claims each year than they collect in premium dollars -- don't feel bad for them (not that you would), they usually make a profit on investment income.

If a sewer or water line breaks, the damage it causes to your house may be covered, but not the cost to repair the break, or the cost of clean up if there is no damage to your house. if your sewer line backs up into your home, the damage & cost of clean-up is excluded, but some insurance companies offer additional coverage for water back up of sewers and drains.

Consider buying water/sewer back-up coverage if you have a sump-pump, a finished basement, have no basement, or keep a lot of property in the basement or your lowest level. what is covered by water/sewer back-up can vary by insurance company, so know what is covered and what is excluded. For example, some companies do not cover sump-pumps, or limit the coverage.

Rather than buy this coverage, you can reduce your exposure by keeping your basement unfinished and unfurnished. Still, a sewer back-up can cost you tens of thousands of dollars, so you may desire the protection.

It is almost always best to "self-insure" or retain a loss if you can afford it and set aside the funds.

Your homeowners insurance does not offer coverage to insure your sewer & water line.

But if the cost of insurance through your utility is low versus the likelihood and cost of a loss, it may be worth it. Snafu's situation makes sense to buy it. DisneySteve's does not.

Homeowners need to know their potential cost for this problem. Tree roots are probably the most common reason for blockages.

Thanks for letting me bore you about insurance.

[Alex53]

Insider's Answer

Hello all!
Although I see this is an older post, I will let you in on some insider information.

I am a plumbing contractor and deal with this issue everyday. We install an average of 80-100 water services a year, in one midsize city. The cost that a home owner would incure on a broken water service would be anywhere between $1,500 to $8,000; considering the the pipe run is between 10' to 150' and depending on how elaborate the run is and the material used. Currently there are two types of material available for a water service run. One is k.copper and the other is cross-linked polyethylene (PEX); PEX is cheaper and has proven to be of similar quality to k. copper.

Here is the million dollar answer to your question: The fact that you would have to replace your water line dependes on what kind of material you currently have. Most older homes contain a lead water service. Yes folks, I said lead! This in-itself could be a very good reason to have this line replaced, rahter than waiting for it to break/leak. The other material that has a very high rate of splitting is plastic tubing, the kind they use for irrigation systems, not to be confused with the blue PEX. If you have either one of these, you better start saving or purchase your prefered insurance. Homeowners insurance typically does NOT cover this type of work, unless you have an added rider. The reason that they do not cover this is because the chances that you will have to replace these lines are very high; so they don't cover anything that has this high of a risk...surprise, surprise! However there are seperate insurance companies that cover specifics like this.

My take on having anything insured depeneds on who you want to have the risk. If you are able to self insure...I personally would take this route; but if you are not disciplined enough to do it, then you may want to commit to an isurance company to take the risk for you.

Good day everyone!
Alex

[Freddy32]

insurance from city waterworks

I would love to have had such coverage when I had a pipe break, but $12 a month seems steep.
When my pipe broke several years ago, it was $800 to get it repaired, plus another $600 in water bills.

Mt Pleasant, SC offers a Service Line Care Program covering the water and/or wastewater service line. Cost is $4 per month. I just got the offer today. I may talk to a neighbor before I take it. That's a lot better than $12/mo.

[keffey]

I've wondering about this for 15 years

The local water company periodically sends offers for water line insurance. It's cheaper than what others in this thread have cited - $5.99/month. However now they are offering it for 50% off - $2.99/month for the first year.

My natural gas supplier, Dominion, also offers it for $3.99/month and they offer sewer line insurance for $4.99/mo. Plus for an additional $1.99 each they will cover landscaping to pretty up the place after the diggers leave.

I had a sewer line clean out a few years ago. A local plumbing company will unclog any drain for $99. My toilet was clogged. They traced the problem to a clogged sewer line and cleaned it out for $99. However they wanted me to spend $5000 for them to replace the pipes. They offered an interest free loan to pay for it. At first I agreed, then I cancelled, and have not had any problems since. I assume if I do have another problem I can have them clean it out again for $99. They might squeal, but I doubt they can turn me down.

What do others think about the value of this insurance? Does anyone have it? Have you used it?

[richard johnson]

it might depend on how old the house (and therefore the existing piping) is. my parents bought a house that was 30 years old and had no issues for about 4 years. then they had about 2 years of back-to-back major water a sewer issues. blech! turns out the pipes that had been used were wearing thin so to speak and one of them got punctured when a plumber ran a 'snake' through the system to address a previous clog issue (which turned out to be tree roots growing through the pipe!). FYI, their homeowners actually covered water damage due to the burst water pipe...

I agree with you.