When we opened an envelope emblazoned with the City of Dallas logo, our first thought was that it was our water bill or some other city awareness campaign about fees and services. But my husband was a little perplexed when he opened it only to find a pitch for a warranty on our sewer line. His first thought: “Is this a scam?”
When he handed it to me, that was my first instinct, too. We receive a lot of direct mail solicitations at our East Dallas home. Insurers who want to sell us coverage, Realtors who want to sell our house, and all manner of businesses who want to serve us. There’s one big difference between all the other direct mail campaigns we receive and this one: They didn’t pay for the honor of using the City of Dallas’ official emblem.
It only set Service Line Warranties of America back $450,000 to use the official City of Dallas logo on their solicitation, but it’s costing the city its reputation and the last remaining ounces of faith and goodwill from its citizens, the people who are tired of driving over potholes, paying for expensive public works projects that may never materialize, and all of the ugly politics at 1500 Marilla.
But I did want to find out if the service that SLWA offers with the endorsement of the city itself is actually worth the $73 annual fee it demands. I asked Charles Polansky, an expert with HUB International, whether this offer is something Dallas homeowners should consider, or if it should hit the circular file like most direct mail solicitations we receive.
Let’s get something out of the way first and foremost – there is not a Texas homeowners policy that covers any damage related to sewer/water lines that are on your property or inside your residence. Furthermore, there are no coverage enhancements or endorsements available to add this coverage. The bottom line is once the line branches off from the city main, it is your responsibility to fix if/when something happens. [emphasis added]
File this away under the heading “The cost of home ownership,” I guess. It’s not all bad news, though. The resulting damage from burst plumbing lines is covered by typical homeowners policies. Let’s say a pipe under your kitchen sink freezes and bursts during a January cold snap. The pipe itself is not covered but the resultant damage to wood floors, cabinetry and anything else is. You’d be on the hook for the price of a new pipe and the labor to install it.
Though I received the same notice as everybody else in Dallas, I know very little about Service Line Warranties of America. I have not seen their service agreement. I don’t know what they promise to cover and what they won’t. Home-related warranties are often more trouble than they’re worth. They don’t have the best reputations. I have heard story upon story of people paying service charges for a tech to show up and then tell them their particular issue isn’t covered – or maybe given pennies on the dollar if it is. But many people must like them. They’re still in business.
Because homeowner policies pick up and cover resultant damage when pipes burst, the biggest exposure is if something happened to the underground line coming in from the city main. It is not going to freeze. I guess a gigantic tree root could shift it enough to cause damage. The bottom line is we are talking about incredibly rare circumstances. Yes, if it burst underground you would be looking at a substantial loss – thousands upon thousands, I would think.
But look at this way. Let’s say your homeowners policy didn’t automatically have coverage for an airplane crashing into your house (it does, by the way). Would you pay more to add that coverage? And do it year after year after year? I guess you might consider it if you lived on the southerly flight line into love field like my girlfriend does!
The bottom line is that s#@% happens, however rare. That’s the world of insurance. Pay a little now to avoid paying a lot more later. If I could get every household in the city of Dallas to give me $250/annually and I’m on the hook for instances where the underground pipes on private property burst and cause damage, i would do it in a heartbeat. I would make money hand-over-fist.
My best advice is to look closely at what is being covered, what isn’t and then weigh that against your annual cost. It won’t be overly expensive. Personally, though, I think you’re better off maxing out liability limits on your home and auto policies or purchasing an umbrella policy.
Are you considering a policy with SLWA for sewer line coverage?