Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
This company has recently partnered with the city of Philadelphia. I assume they are in other markets as well. For just under $100 per year they will insure your water service and sewer lines. These can cost $4k and $6k to replace, respectively. I'm not a fan of home warranty companies but this price seems to be worth it considering the cost of the premium relative to the cost of the repair.
Does anyone have experience with this company?
Philly landlords, are you considering using them? Why or why not?
I don't buy insurance on water/sewer lines. I had a neighbor who recently went through a huge dispute with his water company (PA American Water in Yardley). He paid for the high end insurance for years and finally had an issue, so he filed a claim. He had to pay out of pocket to have his main line fixed, etc and seek reimbursement. It took months of back and forth and finally he got reimbursed (had to involve a lawyer finally, it was rough). And now, they dropped him and stated he can no longer purchase their insurance. He said at this point, he likely paid enough money in insurance all these years, he could have just pocketed that for the repairs (vs. repairs + insurance payments).
To me it seems like too good of a deal and that's why I'm hesitant. I have only seen the pamphlets and haven't seen the full policy. American Water is not in the business to lose money and like you said the cost / premium ratio looks out of line. Maybe they'll jack up the rates in a couple years, maybe there's some other clauses in the details.
All of my properties sit pretty close to the street, like two sidewalk squares so not a ton of digging replacement is necessary if/when the lines fail.
I keep getting similar mails to insure water and gas lines. For the water line they insure the line from the street to the water meter.
Note- it was NOT the insurance of line inside the house, its the exterior line insurance.
so far I did not opt for, I did not felt the real need for it. Additionally, I am always skeptical with these service plans. unless you read the fine lines well there are surprises when the need comes.
From what I recall it was $25/month for the water exterior water line.
I don't buy insurance on water/sewer lines. I had a neighbor who recently went through a huge dispute with his water company (PA American Water in Yardley). He paid for the high end insurance for years and finally had an issue, so he filed a claim. He had to pay out of pocket to have his main line fixed, etc and seek reimbursement. It took months of back and forth and finally he got reimbursed (had to involve a lawyer finally, it was rough). And now, they dropped him and stated he can no longer purchase their insurance. He said at this point, he likely paid enough money in insurance all these years, he could have just pocketed that for the repairs (vs. repairs + insurance payments).
I do not know anything about this company. I would check to see if it an insurance policy and subject to the control of the State Insurance dept. If so, that could help if there is a dispute on a future claim.
I would also check with your insurance agent. More of the companies here in CT are adding endorsements that you can purchase to cover the service lines (water, gas, etc.). If it is part of your policy, the company would be subject to the Insurance laws and regulations in that state.
For $100/year (that can be written off), we're giving it a shot. The beauty of them being associated with the city is that if you have a problem, you don't have to go thru their corporate bs if they're giving you the run around, reach out to your local councilperson. At the local level, they know that every vote counts, and that voters have friends and neighbors that they talk to ... light a fire under them, they'll know the right person to threaten .
I'm leaning towards it. At $100 per year it would take 60 YEARS of premium payments to equal the cost of a sewer line replacement at $6k (40 years of payments to equal the cost of a water line replacement). Plus the expense can be written off.
On properties where I've recently replaced a water line, I'm opting for the cheaper sewer-only coverage.