A majority of homeowners are well aware that they are on the hook financially for anything that happens to their own home and personal property. Since owning a home is a large investment — most homeowners purchase homeowners insurance to help protect their most important and expensive asset.
However, did you know that you’re also responsible for all of the underground service and utility lines that run underneath your property? As the homeowner, you are 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 likely had a home inspection done in order to ensure that all of the existing utility lines are intact and functioning property. But it’s also why you may contemplate adding service line coverage onto your homeowners insurance policy.
While your homeowners insurance may cover costly cleanup and repairs related to rupture plumbing inside your home, it typically does not cover damage to service lines that are running underneath your property. Thankfully, some insurance companies have started to offer a service line coverage endorsement that you can add onto your homeowners insurance policy for some additional premium. If your homeowners company doesn’t offer any service line protection, you may be able to purchase it from an outside source or you may have the option of purchasing a service warranty with your local utility company. However, normally service line coverage is a lower cost option and less hassle than dealing with your utility company.
How does service line coverage work?
As the homeowner, your’re on the hook financially for any service lines or pipes running throughout your property. For instance, if your water pipes crack or your power line is severed, it’s your responsibility to fix. A traditional homeowners policy won’t typically cover broken service or utility lines, but you thankfully have an option to cover these potentially expensive home maintenance issues – the costs of which run a homeowner an average of $2,556, according to HomeAdvisor.
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:
- Water pipes
- Steam pipes
- Sewer pipes
- Drain pipes
- Power lines
- Fiber optics
- Cable lines
- Internet lines
- 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.
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.
What is typically covered by service line coverage?
Here are some examples of damage that’s covered by service line coverage:
- Wear and tear
- Rust, corrosion, decay, and deterioration
- Mechanical breakdown
- Electrical breakdown
- Tree or root-caused damage
- Vermin, insects, or rodent damage
- Weight of equipment, vehicles, animals or people
- Collapse
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.
What is typically not covered by service line coverage?
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)
- Fuel tanks
- Piping or wiring that isn’t connected and ready for use
- Septic systems
- Wiring or piping that runs through a body of water
Is service line coverage worth it?
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.
Farmers Mutual of Nebraska, for example, offers $50,000 of service line coverage for a $40 additional premium which includes Equipment Breakdown Insurance, which ends up being just $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.