You see a lot of commercials selling service line protection. You may also get official looking mailers that ask you to sign up for this type of program. Before you sign up for this, here are some things to consider.
Limits can be low
These products have specific limits for each type of service line or home system covered by the program.
A review of a major provider’s product indicated separate limits for different home systems and service lines. The limits were a maximum of $5,000 per incident / annual aggregate. Limits for some exposures were less than this figure.
For underground lines a $5,000 limit was also applicable to opening and closing public streets and roadways. Depending on the type of pavement present, this could be insufficient for the repairs.
Claims handling
You may be obligated to use the service line recommended contractors to do the repairs. This removes control over the claim from the customer. If you ask for a second opinion, any costs related to providing that second opinion are deducted from your per event limit.
If you engage your own contractor to make repairs the program may not respond to those costs. If you dispute the claim settlement you have to choose between small claims courts or binding arbitration. The small claims court is to limit the size of any recovery.
One agreement even had a hammer clause that if you disputed the settlement and the outcome of the settlement was less than the original offer, you paid the legal fees for the service line company.
Cost
These programs are priced by zip code, and not with any real detail on the property being covered. There is no rating worksheet provided so you cannot see how the premium was developed.
This is not insurance
These programs are a warranty program, not insurance. There may be a surety company standing behind the program who would step in if the warranty program fails to perform, but there are steps to follow and time frames related to determining a default by the warranty company. You do not have the protection of state regulators as with admitted insurance companies.
Your Homeowners Policy
Personal lines insurers are offering service line coverage on some comprehensive homeowners’ forms. A previous article on homeowners forms, What's in the form?, discusses the different homeowners coverage forms.
One carrier offers a $25,000 limit for this exposure and the claim handling and settlement terms are the same for the balance of the policy. The cost for this is imbedded in a broadening endorsement that has other coverage extensions. This is a better limit, cost and claim situation for you.
The Driehaus Difference
We take time to help you understand the options that are available to you in protecting your home. We can help you find the right carrier, the right policy forms, and the most competitive costs. We do not provide prices based solely on your zip code. We need to spend some time with you to understand your exposure to loss and how we can build a program to protect your interests. This is not a “fifteen minutes will save you 15%” undertaking. We are willing to invest our time and expertise to help you. You need to invest your time in sharing information with us to get you to the right insurance program. Call us at 513-977-6860 or use the contact tools at www.driehausins.com to get the process started. We want to be your insurance provider.
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