Do I need water line insurance?
March 25, 2019 5:03 PM   Subscribe

The water company sends me mail suggesting I pay 5.99/ month (72/ year) for 7,000 worth of insurance in case something should happen to the water line between where it connects at the street and where it comes in to my house. Do I need this? I live in Maine, where freeze/ thaw is a regular thing. There are lots of trees, none within 10 feet of the water line. It goes under the driveway at some point.

Have been a homeowner for 30 years, 10 in this house, never got the insurance, but the mail got me thinking. thanks.
posted by theora55 to Home & Garden (17 answers total) 1 user marked this as a favorite

I can only tell you my story about our fair city.... We never took the insurance. A few years ago my neighbor's plumber discovered (on the day I got fired from a job) that we were not actually hooked into the sewer main, but rather our sewer line was hooked into a late 19th c clay sewer pipe that ran down the center of the property lines behind the houses on our street and the one behind us, until it hooked into the city sewer down by Baxter Blvd. And, of course, this 100 year old clay pipe was collapsing.

Neighbors who had the insurance paid nothing. We paid $8K to have ourselves hooked directly into the city sewer. Contractor gave us a bulk discount because they did all the houses on my street and the one behind - about 50 houses in total.

We still don't have the insurance, but we do have all new water lines.
posted by anastasiav at 5:19 PM on March 25, 2019

The water company is making a gamble that there is somewhat less than a 1% chance every year ($72/$7000) that you will actually need to use their insurance. They need to cover their costs of insurance plus make a bit of profit. Say it costs $7000 to fix any damages (complete guess). Are you willing to take a 99% chance that nothing happens and a 1% chance that you have to pay $7000?

Insurance is for events that you can't afford to endure. If you can't afford to fix a water line burst, you should probably buy the insurance. However, I'd also suggest that in that case, you probably can't afford your house, as there are all sorts of things that could happen that require large payments to repair your house on little notice.
posted by saeculorum at 5:24 PM on March 25, 2019 [4 favorites]

Note: I have no special qualification to answer this. If this insurance were for the sewer line I’d be tempted, because for houses of a certain age serious failures are rather common and very expensive. However it sounds like the proffered insurance is for the supply line, which is less likely to ever be a problem. Also there are apparently scammy national companies that mail out ads for such insurance while masquerading as your local utility.
posted by jon1270 at 5:29 PM on March 25, 2019 [6 favorites]

We once had a similar charge from the phone company that covered the wires inside the house.

My view is that if you are so poor that the $72/year is important for food and mortgage, then you don't. If you are so rich that paying the $7000 isn't a great inconvenience, then you don't. In the great middle, it may make sense. The same kind of logic applies to service contracts on cars and appliances: you probably pay more in the end, but you protect against the kind of huge bill that can upset the domestic apple cart.
posted by SemiSalt at 5:29 PM on March 25, 2019 [3 favorites]

When we had to replace this at my house, it was less than $2000. I’m sure it depends on how deep they have to dig (less deep for me than you, probably, since I’m in the South) and how far it is from the meter to the house (about 40 feet in my case). But there’s a data point to give you an idea of what it might cost, anyway.
posted by something something at 5:47 PM on March 25, 2019 [1 favorite]

Is this just for the water line, sewer line or both? If it covers the sewer line I would get it, the original line in your house is clay, concrete or cast iron and in my experience those last about 40 to 50 years in my experience. My house is just over 50 years old and all of our neighbors have had their lines replaced in the last 5 - 7 years. Our sewer line had to be replaced and it was $4500, the new on is PVC and will last the rest of my life, so no need to get insurance. The supply line is galvanized steel or pvc and will likely last a long time and is cheaper to fix than the sewer line. I would not get insurance for that.
posted by Grumpy old geek at 6:52 PM on March 25, 2019 [1 favorite]

Ask your homeowners insurance broker if they sell a similar product. Maybe it’s less expensive through them. Maybe it’s more expensive.

Also, call your actual utility company and verify that this insurance offer is in fact coming from them and not the scammers mentioned above.
posted by bilabial at 7:09 PM on March 25, 2019 [6 favorites]

I can't say whether it's worth it to you, but I can tell you that it would have saved us about a thousand dollars when our water line sprung a leak one fine day, resulting in a nice little fountain in the yard next to the street.

Turned out to be galvanic corrosion in the 80 year old pipework just past the tap from the water main, which made it our responsibility to fix. Being without water for a couple of days sucked, but it would have sucked a hell of a lot more if it had been one of the many times in my life that I couldn't possibly have paid an unexpected bill like that.

The peace of mind in knowing that I wouldn't have to find a plumber, possibly on a weekend, coordinate the work, or do anything else beyond calling the water company and saying "it's broken, please fix" would probably be worth it to me if I owned a house more than 30ish years old. It wasn't hard (other than the part of the digging I did personally to save a couple of hours worth of labor), but it was a bunch of unnecessary stress at a time when there was already enough to think about in terms of arranging our lives to manage without water for a few days.
posted by wierdo at 7:34 PM on March 25, 2019 [1 favorite]

I am not in town and have a septic system which this does not cover. The neighborhood was developed in the 40s

If it's a good deal, then I'd buy the insurance, but it feels like a bad deal. It's definitely from my water company, but they are just the go-between, the insurer is an insurance company and I assume the (municipal) water company gets a cut. I don't know if they do the work or reimburse expenses.
posted by theora55 at 7:43 PM on March 25, 2019

I looked into the sewer line insurance for our home and discovered that the max payouts for incidents were capped so low it would be a horrible deal. Like, pay in 5 years the max possible payout (which still wouldn’t cover a whole major incident) bad deal. None of which was identifiable anywhere but the actual contract.

So my point being, find the actual deal - not what they write in the pamphlet - and read every bit. I doubt my experience was the lone unicorn here.
posted by phearlez at 8:27 PM on March 25, 2019 [2 favorites]

I would ask your home owners insurance agent if a water or sewer pipe in your yard failing is covered in your policy.
posted by Thorzdad at 6:11 AM on March 26, 2019 [1 favorite]

I suggest you get just a little more information from your homeowners insurance before deciding if the idea itself is a bad one. This particular policy might not be right for you, but there might be a good fit that could protect you (possibly a better price with more coverage). If you end up not buying the coverage, consider opening a savings account and autodrafting that amount of this policy into it, for the rainy day water main fund.
posted by bilabial at 7:17 AM on March 26, 2019 [1 favorite]

I replaced my water and sewer line and fixed another issue with my water line recently. It was $3k to replace the water and sewer line and then $700 for another pinhole leak in the waterline. 7 feet underground, 40 feet of digging. In my opinion, those warranties are not worth it.
posted by The_Vegetables at 7:38 AM on March 26, 2019

I recently got a letter from my homeowners insurance company offering a "buried lines" insurance rider -- I don't know if it's new or they just noticed I didn't have it, but reading through all the benefits -- it covers not only water, but sewer, gas, phone, electric, etc -- I signed right up for it. I don't remember what it cost though. But, I'd ask your homeowner insurance first before signing up for something that the water company wants you to sign.
posted by AzraelBrown at 7:43 AM on March 26, 2019

Think about getting your line scoped - it'll probably be 100-300$ but you will have a much better idea of what is going on down there. Pay attention to the language of the agreement - I thought I had sewer line coverage but the claim was denied because the line went under the garage. There is probably a grace period of 1-2 months of payments before the insurance goes into effect.
posted by Dmenet at 8:35 AM on March 26, 2019

I have water line coverage through HomeServe, which is billed in the way you describe through my water service provider. I don't believe there's a maximum, although $7K seems a little low.

My house, which is now over 100 years old, had an ancient supply line and I kind of took for granted that the low water pressure in my house was a reality. I read through the supply line insurance policy and it actually covered low pressure! A local contractor was contacted and they replaced the line from my house to the street. However, the actual water main was on the other side of the street, and a follow-up claim replaced the rest of my line, including tearing up the street to connect it to the main.

If your water line is in good shape, the ground is stable, and the hook-up to the main is on your side of the street, then it might not be worth it. For me, it was. (And my water pressure is infinitely better now. And the line under the street is no longer lead.)
posted by mikeh at 8:54 AM on March 26, 2019

Here's the HomeServe terms for what's offered in my state through Dominion
Exterior Sewer/Septic Line Benefit Limit: The maximum benefit limit is up to $5,000 for each Service Call. Any repair charges beyond Your Service Call benefit limit are Your responsibility.
also, If during a Service Call it is discovered that Your Exterior Sewer/Septic Line has more than two (2) unrelated problems, an entire replacement of Your Exterior Sewer/Septic Line will be necessary, which is not covered by this Service Agreement

Under not covered:
3. Any correction, upgrade, or move of Your existing Exterior Sewer/Septic Line, not directly related to the necessary repair, in order to meet any code, law,regulation, or ordinance;
12. Replacement of Your entire Exterior Sewer/Septic Line;
So it may still be worth it; in my market this is $6 a month and $72 a year is hardly prohibitive. In my case I opted against it because there's a 20' initial run under my foundation which would not be included as "external." So my decision was that I'd be betting that I would have an incident that required snaking or a repair of the 20' run external under $5k (but not so bad that entire replacement was necessary) and not being required by the county to just redo it... and therefor self-insuring (keeping the $72) was a better plan since I wouldn't have to go through them for issues.

But it was close and part of my decision was because my insurance agent at State Farm says they're going to be adding this sort of add-on to my home owner's policy sometime this year and this sort of thing is usually cheaper from them. Your calculus may differ. If my region was $7k max not $5k that larger benefit window might incline me to pick it up.
posted by phearlez at 9:17 AM on March 26, 2019

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