More on Home Insurance
More on Home Insurance
Updated February 4, 2021
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Most homeowners are aware that they’re on the hook financially for anything that happens to their home and personal property. Since owning a home is such a big investment — you get homeowners insurance to protect this very important and expensive asset.
But did you know that you’re also responsible for all of the underground utility lines that run underneath your property? As the homeowner, you’re 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 typically get a home inspection to ensure that all of the existing utility lines are intact and functioning properly. It’s also why you should consider service line coverage for your homeowners insurance policy.
While homeowners insurance provides some amount of coverage for water damage caused by household plumbing and systems, it typically does not cover damage to service lines running underneath your property. Luckily, some insurance companies offer a service line coverage add-on, or endorsement, that you can add onto your homeowners policy for a small additional premium. If your homeowners insurance company doesn’t offer service line protection, you also have the option of purchasing a service warranty with your local utility company, but service line coverage is the more low-cost and hassle-free option.
As the homeowner, you’re financially responsible for any utility lines that run through your property
Service line coverage is a homeowners insurance endorsement that reimburses you in the event that a utility line is damaged
Service line coverage is one of the best value coverage endorsements, costing as little as $30 annually for $10,000 in coverage
As the homeowner, you’re on the hook financially for subterranean lines or pipes running through your property; if your water pipes crack or your power line is severed, it’s your responsibility to fix. Standard homeowners insurance typically won’t cover broken utility lines, but homeowners have a couple of options for insuring this potentially expensive home maintenance issue — the costs of which run homeowners an average of $2,587, according to one estimate.
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 homeowners 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:
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. Another perk of service line coverage is that in many cases you can utilize the same convenient claims service that’s available for standard home insurance claims, such as 24/7 claim reporting, a curated selection of licensed repair companies, in-house claim adjusters, and more.
Among the companies that provide service line coverage, you’ll generally see it offered in amounts of $10,000 and $25,000, although higher and lower coverage amounts may also be an option depending on the carrier.
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Here are some examples of damage that’s covered by service line coverage:
Wear and tear
Rust, corrosion, decay, and deterioration
Tree or root-caused damage
Vermin, insects, or rodent damage
Weight of equipment, vehicles, animals or people
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.
Here are some examples of damage that isn’t covered by service line coverage:
Water well related damage
Heating and cooling systems (but depending on the policy piping for geothermal heating could be covered)
Piping or wiring that isn’t connected and ready for use
Wiring or piping that runs through a body of water
If your homeowners 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.
Travelers, for example, offers $10,000 of service line coverage for a $30 additional premium and $20,000 in coverage for just $40 a year, which ends up being between $2.50 and $3.33 a month, respectively. 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.
Depending on the insurance company, you also may not have to pay a deductible on a service line coverage claim. Travelers’ service line coverage is a no-deductible endorsement. However, Erie requires a $500 deductible before they’ll cover a utility line related loss.
Be sure to check with your insurance company to see if they offer service line coverage, or reach out to an insurance expert at Policygenius who can help you reshop and find a company that offers this invaluable coverage endorsement.
Pat Howard is a homeowners insurance editor at Policygenius in New York City. He has written extensively about home insurance cost, coverage, and companies since 2018, and his insights have been featured on Investopedia, Lifehacker, MSN, Zola, HerMoney, and Property Casualty 360.
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