Ontario municipalities are promoting service line warranties that cover underground pipes on your property. You may already have this coverage, and if you don’t, you can probably get it at a much better price, with higher limits, through your home insurance provider.
A number of Ontario municipalities have been mailing letters to their residents about a service line warranty offered by a private company called SLWC. The warranty is being presented as a solution to a problem that is “not typically covered by your insurance”. While there is a very small percentage of Ontario homes that can’t get this coverage through their home insurer, the truth is:
- Most homes are eligible for this coverage.
- Many homeowners are already covered under their existing home insurance policy.
- If you don’t have this coverage, you can probably add it to your home insurance (with a higher limit) for less than half the price of the municipal program.
Why are service lines an issue?
Service lines are the pipes and cables (water, sewer, electrical, internet, natural gas, etc.) that run underground from your home to the street. Lines that are on your property belong to you, but they’re not always covered under your home insurance, so if they are damaged, whether by wear and tear or excavation, you could be responsible for repairs.
“If pipes and cables are inside your house, they are protected by home insurance,” says Alex Hillhouse, Sales Manager at Mitch. “If they are under the street, the city is responsible for them. But between your house and the street, you could have a gap in coverage.”
The municipal program seems to target water and sewer specifically, while home insurance often covers other types of lines.
According to Hillhouse, about half of all homeowners in Ontario already have service line coverage.
“Some insurance companies include it as part of their standard policy wordings,” he says. “Those that don’t, offer it as an endorsement. The easiest way to find out if you’re covered is to consult your policy or call your broker and ask whether you already have service line coverage.”
Comparing service line coverage
Below is a comparison of the service line coverage offered through municipal warranty programs and what is available through home insurance. Note that the data for home insurance combines coverages from a number of different companies. For more details, contact your insurance provider.
|Home insurance||$0 to $75/yr||Coverage for water, sewer/septic, electrical, internet/cable and natural gas lines||$10,000 to $25,000||Subject to same deductible as any other claim||Most homes qualify|
|Municipal service line warranty||$174/yr||Coverage for water and sewer/septic lines||$5,000 for water |
$8,000 for sewer/septic
|No deductible||All homes qualify|
“The warranties being offered through municipalities are generally much more expensive and offer a lot less coverage than what is available under home insurance,” says Hillhouse.
The warranties do have the advantage of no deductible, but in many cases if there is a rupture of a water line right beside your home, water could enter your house and cause additional damage. If you have a service line warranty, there would be no deductible for repairing the line, but there would be a deductible for damage to your house or contents. If you have service line coverage as part of your home insurance, the entire claim would only have one deductible.
What is the best solution for you?
“If you’re considering the warranty program, you should check with your home insurance provider first,” adds Hillhouse. “In most cases, you can get more coverage at a lower premium.”
If your home is not eligible for service line coverage for any reason, then Hillhouse says the open eligibility of the warranty program will allow you to get protection that is not available otherwise.
Ultimately, we think you deserve the best possible coverage at the best possible price. Give us a call and talk to one of our home insurance brokerss about your current coverage and whether service line coverage is available for you.