The New Year is a time of re-evaluation in every aspect of life. Insurance is no different. It got me thinking, what is there to know about one’s insurance coverage that too many people are just not aware of or not made aware of by their agent? It didn’t take long to identify a common source of confusion, and to resolve to clear up some of that confusion.
So let’s talk about Service Line Insurance.
Simply put, Service Line Insurance is coverage on anything that comes onto your property via wiring or piping, including connection pieces, valves and pumps. As the homeowner, the property owner, you essentially own that portion of the piping and wiring which are grounded on your property, such as:
- Wells and septic systems
- Water pipes
- Power lines
- Natural gas and propane lines
- Steam piping
- Communication or data-transmission wiring
To be covered under Service Line Insurance, three factors have to be met: The service line must be (1) on your property, (2) outside of the house, and (3) buried underground. Pipes and wiring inside the house should already be covered by your homeowner’s policy.
Many people either think the items on this list are covered by their policy as it is, don’t know the coverage exists, or come to find they were never offered it by their agent.
Is the infrastructure of your neighborhood outdated?
If so, chances are, at some point you will encounter service line issues. But the great news is most companies will provide this coverage regardless of your home’s age or the age of the service lines in question.
Service Line policies usually cover about $10,000 worth of damage, and they are, like many over-looked types of insurance, surprisingly inexpensive to add to your policy when you consider the alternative, which is the $10,000 out of your pocket. In 2017, it was determined that the average cost of Service Line claims was $4,428 but it can be much more. One pipe, along with excavation, labor, and everything else that comes along with the repairs has been known, in this agency’s experience, to cost $9,000 alone. So you can imagine how one unfortunate event could send your household back to the Dark Ages. But, again, you could avoid calamity with a $50 Service Lines policy added on to your homeowner’s policy.
It covers repair and labor costs, excavation costs, and the cost of replacement parts (including the wiring and piping itself). Additionally, if you need to uproot your whole life for a few days because of the damage, it will cover hotel costs.
Service line damage can occur in a variety of ways:
- Accidental breakage (landscaping accidents or damage done by heavy equipment)
- Ground-dwelling rodents
- Tree roots creeping in upon the area where the lines are grounded
- Stress fracture of pipes from freezing and thawing
- Electrical surge or lightning strike
- Mechanical breakdown due to the wear and tear of time.
- Unforeseen defect in the equipment.
NOT covered under Service Line Insurance, contrary to common assumption, are:
- Blocked pipes if there is no physical damage to the pipe
- Damage to lines due to landslides.
Contact a Horihan Insurance agent today to discuss what coverage you may need to add to your current policy.