Water Service Line Insurance

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
Post Reply
Topic Author
casualflower
Posts: 382
Joined: Thu Jul 16, 2015 9:36 am

Water Service Line Insurance

Post by casualflower »

Based on a letter I received from Service Line Warranties of America, my city does not pay for repairs to water lines that run from the public utility connection to my home. SLWA is offering to insure any repairs to the line for $4.50 a month. Up to $4,000 per incident. I am very much inclined to self-insure for this, but I am curious...

How often do water lines need repair? How much do it usually cost? Do lots of cities work with private insurance to cover utility-based issues? I believe I've seen a similar letter for sewer line insurance in the past.

Thanks,
David
User avatar
ResearchMed
Posts: 16767
Joined: Fri Dec 26, 2008 10:25 pm

Re: Water Service Line Insurance

Post by ResearchMed »

metrunt wrote: Thu Sep 21, 2017 12:07 pm Based on a letter I received from Service Line Warranties of America, my city does not pay for repairs to water lines that run from the public utility connection to my home. SLWA is offering to insure any repairs to the line for $4.50 a month. Up to $4,000 per incident. I am very much inclined to self-insure for this, but I am curious...

How often do water lines need repair? How much do it usually cost? Do lots of cities work with private insurance to cover utility-based issues? I believe I've seen a similar letter for sewer line insurance in the past.

Thanks,
David
I'm not sure this makes sense, given the limit of $4k.
That's not a catastrophic amount, even if it's really not pleasant, etc.

As comparison, we have our homeowner's deductible set higher than that (to keep the premiums down).

It's not ordinarily something one worries about, unless there is some real risk.

As an example, we kept having clogged sewer line a couple of years after moving in.
We did "everything", including a "sewer line colonoscopy" (tm) :wink:
That showed that the line was being twisted, probably by the roots of the old and ugly tree in our front yard.
We hadn't wanted to replace it, as it was still a nice, live tree.
But instead of replacing the sewer line - which would have involved digging up our *new* hand-laid paver drive - we had the tree removed, and planted a nice cherry tree several feet over.
$4k wouldn't have gone far at all in that case.
And the cost of what we did, including a relatively mature tree (not a sapling) was much less than $4k.

In the future, if we buy again, we'll make note of the placement of any trees and any water or sewer lines, and perhaps be pro-active.

Also, how old is your house and the line?
Our house is nearing 100, so *everything* is "old" unless it's already been replaced, so such things are to be expected.

RM
This signature is a placebo. You are in the control group.
User avatar
dm200
Posts: 23214
Joined: Mon Feb 26, 2007 1:21 pm
Location: Washington DC area

Re: Water Service Line Insurance

Post by dm200 »

metrunt wrote: Thu Sep 21, 2017 12:07 pm Based on a letter I received from Service Line Warranties of America, my city does not pay for repairs to water lines that run from the public utility connection to my home. SLWA is offering to insure any repairs to the line for $4.50 a month. Up to $4,000 per incident. I am very much inclined to self-insure for this, but I am curious...
How often do water lines need repair? How much do it usually cost? Do lots of cities work with private insurance to cover utility-based issues? I believe I've seen a similar letter for sewer line insurance in the past.
Thanks,
David
Interesting.. In our monthly electric bill (Dominion Energy in Virginia) we were offered the same kind of "insurance" for water line(s) for about this monthly fee. It seemed very, very odd that the electric company would offer insurance on water lines..
TLC1957
Posts: 396
Joined: Sat Mar 18, 2017 7:49 am
Location: Pa

Re: Water Service Line Insurance

Post by TLC1957 »

My daughter worked for a large water company in the marketing department. This was a significant money maker for them. Very few payouts over the two years she worked for them. What is the condition of your pipe, is it copper, galvanized pipe, or something else,do you have low water pressure, how old is it, have the neighbors had any problems?

The city usually pays up to the property line/curb, you will be responsible from the curb into your house. Is this a great distance or under 20 feet?
killjoy2012
Posts: 1329
Joined: Wed Sep 26, 2012 5:30 pm

Re: Water Service Line Insurance

Post by killjoy2012 »

The same company has been heavily marketing their insurance product to our community for the past 3 years. They even talked our mayor/city council into mailing their advertisement with a city endorsement on city letterhead. The majority of homes in our city were built from 1920-1960, and yes, main sewer line failure is fairly common & a costly repair. In fact, my brother who also lives in the same city had to replace his just a couple years ago. While I find our city endorsing a company's insurance product a bit revolting, I'm also guessing they're having a lot of retired/low income/poorer households whose lines fail coming to the city for help... only to find out the financial burden is on them -- a bad situation all around.

I'm not purchasing this insurance for a couple reasons.
1) I can afford to self-insure; a $4-15k repair will not bankrupt me.
2) I have little faith in this relatively no-named insurance company. Will they be there if I need to make a claim? Are they going to fight me like most home warranty companies do?
3) Even at the $4K max payout, that will barely cover the minimum repair/replacement cost for most homes in my area.
4) I want the flexibility to fix/repair the line in the manner that I deem best, using the contractor I deem best -- not negotiating with a 3rd party adjuster. e.g. trenching and replacing the line is a very different approach/cost vs. lining the existing pipe. Both have their pro's & con's. Trenching, while a cheaper job, also creates a huge mess and replacing landscaping is not cheap.
User avatar
queso
Posts: 1340
Joined: Thu Jan 07, 2016 2:52 pm

Re: Water Service Line Insurance

Post by queso »

I replaced the service line in my old house and still elected not to buy the insurance on my current house. Total cost for an underground pull (very cool process...uses a tow truck to pull new line through the old without any digging) was around $2500-5000 depending on which bid you went with. I figure it doesn't happen often and, as others have pointed out, I generally insure against things that have the potential to be catastrophic (auto liability, umbrella, personal disability, life, etc.). This is simply a "home repair expense" so I treat it as such.
jbmitt
Posts: 657
Joined: Mon Jul 14, 2008 1:00 am

Re: Water Service Line Insurance

Post by jbmitt »

I work in product development for a personal lines insurer. We offer service line coverage as an additional endorsement, or it can be bundled with other endorsements as part of an enhanced policy.

Limits are usually $15,000 with a $500 deductible. The annual premium is usually $10-25 bucks. On some policies, this coverage is provided with no additional premium.

I don't have it because I have a new house, I'd maybe consider it if I had old pipes. Insurers are aware of the potential for adverse selection on this type of coverage.
User avatar
Watty
Posts: 28813
Joined: Wed Oct 10, 2007 3:55 pm

Re: Water Service Line Insurance

Post by Watty »

One thing to watch out for is that it if there is a problem it might be a good idea to completely replace the line but they might just repair a small section instead.
denovo
Posts: 4808
Joined: Sun Oct 13, 2013 1:04 pm

Re: Water Service Line Insurance

Post by denovo »

jbmitt wrote: Thu Sep 21, 2017 2:49 pm I work in product development for a personal lines insurer. We offer service line coverage as an additional endorsement, or it can be bundled with other endorsements as part of an enhanced policy.

Limits are usually $15,000 with a $500 deductible. The annual premium is usually $10-25 bucks. On some policies, this coverage is provided with no additional premium.

I don't have it because I have a new house, I'd maybe consider it if I had old pipes. Insurers are aware of the potential for adverse selection on this type of coverage.
I was going to say this exactly, if you really want this coverage, get it as a rider on your home insurance.
"Don't trust everything you read on the Internet"- Abraham Lincoln
User avatar
CABob
Posts: 5091
Joined: Sun Feb 25, 2007 7:55 pm
Location: Southern California

Re: Water Service Line Insurance

Post by CABob »

It appears to me that Service Line Warantees will provide service for several types of utilities and are not associated with a utility company. I have not heard of them but do occasionally get solicitations for similar services for telephone, sewer, gas, etc. I have declined and chose to self insure. It doesn't seem to me that these types of problems are not that common.
A search for reviews does not produce many favorable comments. https://www.homewarrantyreviews.com/rev ... anties-slw
Bob
BV3273
Posts: 909
Joined: Mon Oct 19, 2015 7:20 pm

Re: Water Service Line Insurance

Post by BV3273 »

Just got something in the mail about this. My neighbor just had an issue and they had to shut down the main on our block. He was on the hook for around $8k. I'm seriously thinking about going for it since all the houses on are block were built in the late 30s and we have been through similar epidemics with gas lines, etc...already.
User avatar
lthenderson
Posts: 8499
Joined: Tue Feb 21, 2012 11:43 am
Location: Iowa

Re: Water Service Line Insurance

Post by lthenderson »

Our town has been getting those mailing as well and similar pricing.

The price to hire it done has a lot to do with location. Here in rural America, it runs about $40 a foot to replace your service line lock, stock and barrel. I've heard in some urban centers they charge as much as $200 per linear foot. If you want to save money and aren't afraid of a day of manual labor, you can rent a trencher, hire a plumber to replace the line, back fill the trench and reseed your lawn for probably around $500 for under 40 feet of line.
adamthesmythe
Posts: 5761
Joined: Mon Sep 22, 2014 4:47 pm

Re: Water Service Line Insurance

Post by adamthesmythe »

Read carefully to understand exactly what is covered. Almost certainly restoration of plantings, grass, sidewalks, etc. is not included. Trench and refill leaves your front yard looking like a freshly dug grave.

I had these offers and rejected them. I knew if I had a problem I would be paying for more than just trench and refill. I saw no reason to insure for a fraction of the total project cost.
CurlyDave
Posts: 3182
Joined: Thu Jul 28, 2016 11:37 am

Re: Water Service Line Insurance

Post by CurlyDave »

What does the policy really cover?

The rat I smell is that it probably covers leaks only. My experience has been that the most common reason to replace a water service line is corrosion/deposits in the old line which reduce water flow below an acceptable level. This will eventually happen to almost any galvanized water line. If it is covered, how low does the flow rate have to go before they will pay? If it isn't covered, you can have a big bill even with the insurance.

Another question is what will the local building department make you replace the line with? When I recently did an extensive remodel they made me upgrade to 2" copper line, to support fire sprinklers. Will the insurance cover the cost of a line upgrade?

I have never had any home warranty service actually pay anything despite at least two legitimate claims...
Answering a question is easy -- asking the right question is the hard part.
iamlucky13
Posts: 3512
Joined: Sat Mar 04, 2017 4:28 pm
Location: Western Washington

Re: Water Service Line Insurance

Post by iamlucky13 »

metrunt wrote: Thu Sep 21, 2017 12:07 pm Based on a letter I received from Service Line Warranties of America, my city does not pay for repairs to water lines that run from the public utility connection to my home. SLWA is offering to insure any repairs to the line for $4.50 a month. Up to $4,000 per incident. I am very much inclined to self-insure for this, but I am curious...

How often do water lines need repair? How much do it usually cost? Do lots of cities work with private insurance to cover utility-based issues? I believe I've seen a similar letter for sewer line insurance in the past.

Thanks,
David
How often? Seldom enough that they can make money on a $4.50 per month premium plus their overhead. I'd pass on the offer.

Galvanized pipe will corrode through and fail, depending on soil conditions, usually in a 20-40 year time frame. Polybutylene pipe (fairly common from the late 70's to mid 90's) can get brittle over the course of a couple of decades and crack. In either case, there's a chance you'd had to replace the entire service line, and I strongly suspect replacement for those materials are specifically excluded in the terms.

Copper, PVC, and polyethylene, however, can last significantly longer than the previous two materials and are not generally considered a significant longevity concern.

I'm not familiar with cities working with private insurers on service line coverage. The usual message is that anything downstream of the meter is the customer's responsibility.

There was a thread about sewer concerns here recently where I believe the poster who started it found out he could get a rider on his homeowner's policy covering repairs and damages for a very low rate.
10YearPlan
Posts: 263
Joined: Tue Dec 22, 2015 1:58 pm

Re: Water Service Line Insurance

Post by 10YearPlan »

I think the problem is pretty common in older homes/neighborhoods. I have firsthand experience with it on a rental property. It cost $5500 and that did not include the repair to the sidewalk. Yes, it hurt but I still choose not to buy the insurance because there is just too much fine print. I asked the guy who did my repair whether he thought the insurance was worth it and he emphatically said no. He said he's rarely done a repair that was covered due to the fine print. That was enough for me.
azurekep
Posts: 1179
Joined: Tue Jun 16, 2015 7:16 pm

Re: Water Service Line Insurance

Post by azurekep »

metrunt wrote: Thu Sep 21, 2017 12:07 pm Based on a letter I received from Service Line Warranties of America, my city does not pay for repairs to water lines that run from the public utility connection to my home. SLWA is offering to insure any repairs to the line for $4.50 a month. Up to $4,000 per incident. I am very much inclined to self-insure for this, but I am curious...

How often do water lines need repair? How much do it usually cost? Do lots of cities work with private insurance to cover utility-based issues? I believe I've seen a similar letter for sewer line insurance in the past.

Thanks,
David
We got a similar letter for both water and sewer. We input the name of the insurance comapny (different from your's) and "scam" into a search engine and got a lot of hits from people complaining about the service.

Such a search also brings up articles about a number of cities across the US that are sending out such letters. The upshot of most of the articles (that I've read) is that these insurance schemes are not necessarily scams, but they aren't necessarily a good deal either. It's better, they say, to set aside a pot of money for any potential water/sewer line maintenance issues, i.e., self-insure.

I had also read previously that these types of services, if at all needed, would be more appropriate for areas that experience an annual freeze/thaw rather than the more moderate climates. Also, if there are a lot of trees on your property, it's a good idea to determine whether the root systems might interfere with the water/sewer lines.
elisa
Posts: 31
Joined: Wed Aug 05, 2015 7:25 pm

Re: Water Service Line Insurance

Post by elisa »

I had to have my 3/4" lead water service line originally installed in 1928 replaced in 2015 in an urban neighborhood in MA. The contractor charged $1800 for a job that turned out to be complex, disruptive, and time-consuming.

The job required coordination with the municipal water department who provided a list of approved contractors, called "bonded drainlayers". I learned that 9 times out of 10, the replacement is relatively straightforward. In my case, the job was problematic due to the clay soil and condition of the pipe.

I have received insurance solicitations such as you describe prior to, and since, the work was done. My sense is that that insurance would not have appreciably improved the situation or cost. My evaluation is that contractor and municipal water department handled a problematic situation well.
Post Reply