December 16, 2019

Service-line coverage can save the day

Service-line water pipe

What would happen if the sewer line gave out in your front yard? Picture this scenario: One morning you enter your basement and discover that a backup of sewage has caused havoc across your floor, ruining carpet, damaging furniture and other possessions and staining the drywall. This is going to cost a lot of money to fix. The basement will need to be drained, cleaned and repaired.

The inside damage will be covered by homeowner insurance, but what about the outside? Your city or town will only take care of the sewer pipe up to your property line. The entire sewer line needs to be dug up and replaced, then new landscaping is needed to restore the yard to its former state, costing thousands of dollars and creating terrible inconvenience.

A better outcome

This type of catastrophe and other service-line mishaps can have a better outcome. Service-line coverage added to your homeowner policy covers utility lines entering your property. It covers costs of repairing damaged service lines and other related expenses (like digging up the yard!). Because service-line damage isn’t likely to be covered in basic homeowner insurance, it is highly beneficial for the homeowner to add this coverage.

Service lines include electric, gas, media/Internet, sewer, water and plumbing lines — all essentials for the home — making this coverage a must-have. Service lines on your property are your responsibility and will require your money to fix, should they break. Service-line coverage takes care of, or significantly reduces, repair and replacement costs, leaving you fully prepared and covered in a worst-case scenario.

The trouble with warranty programs

Perhaps adding service-line coverage seems like too much money or trouble. You may have heard of another option (in Illinois), offered through Nicor Gas. The warranty program (which is currently offered by a provider called Pivotal Home Solutions) can cover gas, electric, media/Internet, water and sewer-line repairs. You can pick and choose which warrantied services you would like.

Being able to choose coverages a la carte seems like a good deal. However, add them all up and it will cost well over $200 per month, which amounts to more than $2,600 a year. If you can’t afford that, now comes the harder part. The task of picking and choosing which utilities to cover through the Nicor warranty program is problematic.

Problems and solutions

How do you know which service-line warranties to select? You will not be able to predict which one may fail, making you feel compelled to subscribe to all. As a result, you, the homeowner, will be paying far more for coverage with Nicor than from an insurance provider. Add to this the possibility that in a major catastrophe, the maximum coverage amount provided by Nicor’s home-warranty plan might not be enough to fully cover it.

In contrast, service-line coverage added to a homeowner insurance policy averages approximately $30 to $35 per year and covers all service lines. Another benefit is that you get to select your own provider at the best rate, as opposed to being required to use a specific contractor, as with the Nicor warranty program. Utility catastrophes can happen at any time, and the best way to be prepared is by getting service-line coverage through your independent agent at Bradish.

by Jackson Mainellis (article updated December 2021)