"You are receiving this letter to advise you of your responsibilities," read Let ABC15 Know viewer, Rusty.
Rusty shared his story with us after receiving a letter about insurance coverage that prompted him to ask, "if this is really real?"
The letter from American Water Resources states: "Water service line repairs are typically not covered by standard homeowners' insurance." The letter goes on to offer protection for $3.49 a month.
Rusty says he and his wife have received similar letters before and typically throw them away, but this time they Let ABC15 Know that they wanted to learn more.
The letter and the insurance offer are real, but it's not mandatory.
Service line coverage can refer to water lines, sewer lines, or both. Service lines are buried pipes, wires, and cables that supply your home with utility services. Utility providers maintain the lines leading to your property, and homeowners are usually responsible for the lines that carry the service from the street to your home.
For Rusty, he says his HOA covers repairs to the front of the property. So for him, additional insurance isn't necessary.
"We don't invite more expenses. We're lucky if we, every month, can meet our budget," he explained.
The letter asks for a response by a specific date, but there's no real obligation. The letter does say the coverage program is optional.
While the letter to Rusty did not have a city or municipality logo on them, some service line warranty companies do have partnerships with cities and municipalities. The added logo can cause added confusion for consumers making the insurance seem like it's endorsed and mandatory. It is not.
If you are a homeowner, you may receive a similar letter. Marketing materials often warn of dramatic potential costs if you don't protect yourself with coverage.
Before signing up for a water-sewer service warranty, try these tips:
- Check your odds. Consumers' Checkbook, a nonprofit consumer advocacy organization, reviewed warranty plans and found typical costs for coverage range from $4 to $13 per month. However, the review found claims for catastrophic restoration and repair are rare, making coverage potentially unnecessary. You can read the report and more on the cost of claims, here.
- Consider the age of your home. If your home was built decades ago, underground service lines could be made of older materials and be more susceptible to wear and tear and leaks.
- Ask your insurer about service line options. Your insurer may offer an endorsement or add on to your standard policy to include service line coverage.
