I received a notice from our local water authority that for $49.95 per year they will pay for up emergency service from a qualified plumber for outside line problems, up to $2500 each visit.
Anyone out there have opinions on this? Does homeowners insurance cover broken underground pipes?
To my knowledge, insurance would not cover the pipe. It may cover damage from water if it happens, but check with your agent for details.
As for the $50 a year, it is pretty much like any extended warranty. It may be a good deal in an older home with old pipes. If three on your street have already broke, pay the 50 bucks. If your house is 5 years old, probably not worth it. I've been a homeowner for 38 years. At the present rate, I'd have $1900 spent and have not needed it yet. It is a gamble.
Read the fine print to be sure what it covers. You mention emergency service. What if the pipe leaks, but does not cause an emergency? Will it cover the replacement anyway? Ed
I was searching my memory, and I can't remember once when I knew someone with a broken outside pipe.
I'd suggest to call a couple plumbers, and ask how many of this type of call they get each year. Might be a lot, might be few?
Been a few in my neighborhood old houses 110+ , and big tree roots pushing as they grow, My neighbor just had it happen. it wasnt covered in his reg policy, Id say your ins co could do it cheaper but for an old house with a long expensive run its worth looking into.
It is more common than you might expect - my wife worked for a water company and they would cover repairs on their side of the meter but any on the homeowners side were the home owner's responsibility.
My neighbor just had one and it cost $600 for the repair (on a weekend).
Read your policy or call your agent, but I'd bet this is not covered. Do you really need to insure against something this unlikely and inexpensive? If you can't afford to cough out $1000 for an unexpected household repair, you are in serious financial straits indeed. Heck, even putting something like this on a low interest rate credit card would be better than buying this plan, IMHO.
It's all about risk, and how much of it you are willing to accept. In my case, I usually self insure instead of buying service contracts and extended warranties and other things that protect you from relatively inexpensive events. Auto, homeowners, health, etc... are good things to insure. When these things go bad, it can get expensive fast. Little expenses? Why bother?
If I add up the costs of all the extended warranties and teeny insurance policies and service contracts that I have been pitched over the past 2 decades and compare that to what I've paid out of my own pocket for repairs for the things that those warranties may have covered, I am thousands ahead by not buying protection. Your rate on this "insurance" is $20 per thousand dollars of coverage per year. If you got a bill from your homeowners insurance charging you this same rate per thousand for your $250,000 house, you'd have to pay $5000 per year. But at least that $5k policy would cover a large variety of damage. This pipe thing only covers a broken pipe. What if you homeowners insurance only paid for fire damage, but not hail, theft, liability, etc..????
The pipe insurance sounds cheap, but for what it pays for, it's really not a good deal in my opinion. I'd take my chances- in the past 20 years of homeownership, my outside water pipes have had no problems. If I ever have to hire a plumber for something like this, I have cash set aside for this reason. That's what savings accounts are for. Pay cash for the little stuff, and insure for the stuff that will put you in serious financial jeapordy. I rarely have to tap into my savings for repairs, and when I do, I replace the money with my savings on not buying all those little service contracts. Dave
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