Recently on one of our local newscasts, a reporter did a piece on a company that was sending out solicitations to purchase insurance coverage to pay for the damage when a water/sewer/gas line breaks between your property line and your home. (typically, these lines are called ‘service lines’ because they transport some service to you like water, gas, sewer, etc.) I am not here to address that coverage because it is a specialty item we don’t deal with. However, at the end of the newscast I heard the reporter say that the cost to detect the leak and repair may come under your homeowner’s insurance and therefore, this “extra” coverage might be unnecessary. We immediately e-mailed the station and told them that THIS WAS NOT TRUE. Service lines are NOT covered under a standard homeowners policy. The truth is that the service line from the company demarcation point (usually the water or gas meter) to your home is your responsibility and is not covered by a typical policy.
Probably the hardest “claim” calls we get at Sage Insurance (and I would imagine all agents feel the same) is when our insured’s (you) tell us you have a water line break, say, under your driveway. It can be under your yard, your patio, etc. You are sure it’s a homeowner insurance claim, but it isn’t. The cost to you can range from a few hundred dollars to several thousand dollars depending on what has to be dug up and repaired.
I knew it wasn’t covered when I heard the report, but I took the time to call several of our insurance company claims adjusters just for the right “words”. First of all, you are covered for water damage (not flood) to your home – the water has to damage your home, itself. So when you find your icemaker disconnected and ran water all night, all that resulting damage to your house is covered. The only part, besides your deductible, that is your responsibility is to repair or replace the icemaker. The plumbing repair cost is always yours because it’s a “wear and tear” issue.
For water damage to be covered it has to be “direct, physical loss to property” – it must damage the house and/or your belongings. Often the water flows under the baseboard or under the flooring and the insurance company will tear out the old and replace with new. “However, such tear out and replacement coverage only applies to structures if the water causes damage to the building.”
When you have a leak under the driveway, for example, which is outside the building, you are responsible and your homeowner’s carrier will not pay any part of your loss.
I also spoke to both the Las Vegas and Henderson water districts to see if either of them respond in any way – they do not. They both have a limited Leak Forgiveness Program. If you qualify, they have a 1-time program that will help pay a portion of your increased water bill. If this happens to you and your water bill is hundreds more than normal, you definitely should contact them for the requirements to get some of the bill reimbursed.
But the bottom line is clear. If you have a service line break outside the structure, you may well be facing an expensive repair job.