Should I get utility line protection insurance?

Many residents receive solicitations from utility companies offering utility line protection, a type of insurance policy that’s also called a “home protection program” and a “utility line warranty.” This additional protection covers the cost of repairs to utility lines that run to or inside a home. Insurance and warranty plans are offered by all major utility companies, including FirstEnergy (Cleveland Electric Illuminating Co.), Dominion Gas, Cleveland Division of Water, and IGS Energy, as well as other providers.

Determine Whether You Need Utility Line Insurance

In many cases, homeowners almost never need to replace or repair their utility lines. However, when a water line, sewer line or electrical line does break, it can cost thousands of dollars to repair. 

Consider the following before purchasing utility line insurance:

  • Check with your homeowner’s insurance agent to see what’s covered by your policy. Most, for example, do not cover sewer backups, though homeowners can purchase a special rider. Shaker homeowners who live in neighborhoods more than 40 years old should consider this additional policy.
  • Ask neighbors whether they have had to schedule repairs or replacements. If a neighborhood’s pipes and lines are original and residents have had to make replacements, purchasing a plan might be in order.
  • Understand what a particular program covers. For example, the Cleveland Division of Water’s program covers water and sewer lines, and indoor plumbing. Other providers have plans that cover electric lines, gas lines, furnaces, air conditioners, heat pumps, and water heaters.

Home Repair Emergency Fund

An alternative to utility line insurance is for homeowners to set aside a budgeted amount of money each month as a home repair emergency fund. This enables consumers to select their own contractors, rather than defaulting to the insurance provider’s contractors. Of course, homeowners who decide to purchase utility line insurance always should shop around, speak to several providers, and reference the Better Business Bureau.

Cost

Rates vary and some are packaged together while others offer each service separately with individual monthly rates for each service. Some companies charge $3 to $10 per month. Others offer a one-time annual payment of $36 to $120. Fees usually cover $1,000 to $4,000 in applicable repairs or replacements. Most policies have a cap on the amount of coverage provided.

Coverage

Coverage depends on the provider. Generally, only repair or replacement of a line or appliance is covered, not damage to personal property caused by a leak or break. For sewer coverage, most only cover sanitary sewer lines, not storm sewers. Typically, the following situations are NOT covered:

  •     Clogged sewer lines
  •   Damage caused by freezing if the line was not properly heated
  •     Damage caused by natural events, such as a flood
  •     Damage to a line caused by the homeowner or a third party (e.g, a contractor)
  •     Pre-existing conditions

Find more information on Home Utility Line Insurance Programs from the Ohio Consumers’ Counsel (PDF).

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