What is Service Line Coverage?
Many clients inquired about insurance offering letters they received regarding service line insurance. Just one of many marketing spam/scam letters or are they truly legit? First of all, Service Line is the underground utility lines that run between your home and the public streets - including water, natural gas, power, communication lines and sewer pipes. Many homeowners don't realize these lines belong to them and neither the city, nor the utility companies are responsible for the cost of repair or replacement.
So YES, these are legitimate insurance offerings designed to meet the real needs of the homeowners. Having said that, homeowners should know that in addition to purchasing the service line insurance offered by these companies, they can often get the same or better protections from their own homeowners insurance carriers for the same or less premium.
Exactly what's covered by these companies vary from one to another. Many covers "water lines" only while Farmers Insurance Service Line Endorsement will cover more than just water lines. It's important homeowners exercise their own due diligence in finding out exactly what's covered.
Farmers Insurance endorsement provides coverage for direct physical loss or damage to service line covered property that is caused by a covered loss, including any excavation costs for repair/replacement, and Loss of Use expenses incurred.
The following scenario would be covered by this endorsement - a tree root grew through a sewer pipe located under the homeowner's yard, causing it to leak. The sewer line was 200 feet long and required a backhoe to dig up the damaged piping and replace it.
Table below illustrates coverage difference between those offering received in the mail vs. Farmers Service Line Endorsement.