Did you know that homeowners are responsible for their buried utilities inside and outside of the home?
But guess what. Your homeowners insurance doesn’t consider buried utility lines part of your house. In the insurance industry, we call this a gap in coverage.
The Traditional Solution to Buried Utility Coverage
For years, utility companies have offered protection that you could purchase to cover your underground lines. For instance, let’s say roots grow through your sewer line causing it to clog or collapse. The utility company would pay to excavate and repair the damage. Just as long as you opted to pay them the monthly charge. It varies, but I’ve seen roughly $5 a month to get $10,000 or $15,000 of coverage. Obviously that’s well worth it if you end up needing to do repairs.
The problem is that $5 a month only covers 1 utility line. So, if you’re planning on having all of your buried lines covered, it can get pricey!!
If you’ve got water, sewer, gas and electric let’s say… at $5 each that’s $20 a month. Add that up for 12 months and you’re paying $240 a year. Ouch! Imagine if you had more buried lines still like internet, fiber or phone. Cha-ching.
Homeowners Insurance and Buried Utility Coverage
Several years ago homeowners insurance companies started offering buried service line coverage. And Cheap! Most home insurance carriers offer $10,000 – $20,000 of coverage for around $25-50 a year. Unlike the utility companies, that’s the annual total, not the amount per line.
Bear in mind though, it’s not part of the base policy language. You’ll need to get the coverage added on by endorsement. But at $25 a year, this coverage is a no-brainer.
What Does Service Line Coverage on Home Insurance Cover?
Here are just a few of the ways your buried lines can be damaged that would trigger a homeowners claim:
- Rodents
- Freezing
- Nearby Construction
- Rust
- Digging on Your Property
- Corrosion
- Mechanical Breakdowns
And most of the time, the utility company will require you to pay for the repairs. They rarely step up to accept liability. Necessary repairs include:
- Excavation
- Repair of the Damage
- Expediting Expenses
- Loss of Use of your Home
- Damage to Your Landscaping
How to Tell if you Have Coverage
Companies have a variety of names for this coverage. They’ll use terms like Service Line Insurance, or Buried Utility Line Insurance. This coverage is probably called out on your home insurance declarations page. The dec page is the first page – or first couple pages of your homeowners insurance policy.
If you’re not used to looking at insurance policies it might be tough to tell if you have service line coverage. In that case, you may want to have a quick conversation with your agent.
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Homeowners insurance is complicated. And the devil’s in the details. There are several homeowners insurance endorsements like Service Line Coverage that you should be aware of. Having a conversation with a good agent could save you thousands in repairs some day.
