Three Scenarios When Utility Protection Plans Are Worth It

As a new homeowner, you may have been surprised to learn that you are responsible for the sewer and water lines that run from the street to your home. No, you didn’t install them. No, technically you don’t own them. But either way, it’s a potential headache for you: If a water main breaks or a sewer line fails, you’ll have to pay for repairs.

When you receive a scary letter in the mail telling you that replacing or repairing those pipes could cost between $2,585 and $8,500 , signing up for a “utility protection plan” (also known as service line insurance) seems like a great idea. For a small amount of money, you get peace of mind knowing that any sewer or plumbing problems will be paid for. This is especially nice since sewer and plumbing problems are not always covered by standard home insurance policies.

So yes, it seems like a great idea, but in most scenarios you don’t really need this utility protection plan. There are only a few specific scenarios where this makes sense.

You will probably never need to use a utility protection plan.

While you buy any insurance with the hope that you’ll never need it, there are reasons to believe that you don’t actually need a utility protection plan to cover water or sewer pipe repairs:

• Repair/replacement costs are greatly exaggerated. The average cost for a plumbing repair is just $950 (with the highest cost typically around $1,575). Sewer lines can be more expensive (maximum price is $7,500), but average around $4,000 . What’s more, according to research by The Wall Street Journal , most claims under these policies are made for much less, since a problem like a clogged line can often be resolved with an inexpensive service call.

• The likelihood of problems with your plumbing or sewer system is actually quite low. A study conducted by the University of Utah found that the average replacement lifespan for water mains is 125 years . According to a Wall Street Journal study, an analysis of municipal permitting records shows that the likelihood of a water or sewer line needing repair in a given year was less than 1 percent.

• Finally, it’s likely that you can add utility protection to your homeowner’s insurance as an endorsement for much less money (usually $30-$40 per year ).

When Purchasing a Utility Protection Plan is a Good Idea

So, generally speaking, you probably don’t need to purchase line protection from your utility provider (or the third party company they partner with to offer it to you). But there are specific scenarios where purchasing this protection makes sense.

First, if you can’t add it to your homeowner’s insurance, it’s worth looking into. Even then, you probably won’t need it unless your home falls into one of these scenarios:

1. Your home is over 50 years old AND your water and sewer lines have never been replaced. As noted, the average replacement life of water and sewer networks is about 125 years, and the expected service life of a water main is about 84 years . Once these tubes reach their sixth decade of age, the likelihood of a problem will begin to increase. So if your water and sewer lines are getting old, a protection plan starts to make more sense.

   You can try to determine the age of your water and sewer lines in a number of ways . You can search for a permit at your building office; even if the utility or county did the work, there will be permits as evidence. You can also go down into the basement or basement and look at the exposed pipes leading into your home; if they look ancient (rusty and corroded) then they probably are, and sometimes there are stamps on the pipes that will give you information about their age – although this will take some research as these markings are usually unique to the manufacturer (plumber) . maybe I can help you). You can also make some educated guesses by finding out what your pipes are made of – cast iron, for example, probably means your pipes are really old. If this is not the case, you can contact your utility’s customer service and they may be able to tell you the history of your water/sewer lines.

2. Other houses near you had problems. Ask your neighbors. If more than one of them has experienced the joy of a water main break or sewer line replacement, chances are the plumbing in your area is old and all the lines are at risk of failure. This makes a protection plan a smart investment.

3. You are already experiencing signs of faulty service lines. Do you suffer from chronic low water pressure or frequent sewer or septic tank blockages, but your neighbors do not? These are signs that your service lines are outdated, damaged , or blocked. Clearing a sewer line or calling a plumber to check your water supply may solve the problem, but if it doesn’t, protecting your utility lines may pay off sooner rather than later.

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