Caution: Service Line Insurance

Every year, thousands of people call their water utility companies after receiving very concerning letters from Service Line Warranties of America (SLWA) to see whether or not they are a scam. These letters claims to offer insurance for the water lines connecting your home to the street.

Most people are concerned because the letter makes this insurance sound like a requirement, when in fact is not required by either municipal or state governments. This is a marketing campaign by the company trying to attract new clients.

What you should know is that the average Homeowner’s policy in Wisconsin does not provide any coverage for this kind of loss. And even if you get a policy for this, not all policies are created equal and some can be very restrictive and expensive. Before buying coverage it is important to understand two things:

DOES MY HOUSE NEED IT?

The life expectancy for a water service lines is 75-100 years. What is it? Simply a 1-inch copper pipe that sends clean water from the main under your street to your house. They are much smaller and stronger than sewer lines, which are made of a clay-like material.

The average water line claim is between $5,000-7,000. Without coverage for your water service line, you could be paying this out of your own pocket if the need arises.

WHAT IS COVERED?

While you might think you are covered against anything that could happen when you buy a policy, this is far from reality. It is important to read and understand the “fine print” of the policy, or have your trusted agent explain it to you. SLWA’s policy only coves leaks caused by normal wear and tear. It also does not cover root invasion, rust/corrosion, deterioration, collapse, mechanical or pressure system breakdown, or freezing. Nor does it cover damages to other utilities, like telephone lines, steam pipes, drainage, sewer or septic lines.

WHAT SHOULD YOU DO?

The top insurance companies can provide this coverage—it’s not just SLWA. Your agent can help you make sure you are adequately covered in the event of a loss by adding it to your homeowner’s policy. It is very affordable, about $1-2 per month.

Image property of the Hanover Insurance Group.