What to Know About Utility Line Warranties

Ohio utility consumers may receive letters or communications trying to sell utility line warranties for repairs to water, sewer, electric, or gas lines. Some of those letters may have the utility’s name and logo or be an insert in the utility bill. The Office of the Ohio Consumers’ Counsel (OCC) offers information to consider when deciding whether to purchase a utility line warranty program.

What are utility line warranties?

Utility line warranties are designed to cover all or part of the cost of repairs to utility lines that run to or inside a home that would otherwise be the customer’s responsibility. Utility companies frequently partner with third-party companies to sell and administer utility line warranties.

It may be unclear who is responsible for utility lines. Generally, utilities are responsible for the lines outside the home. Property owners are typically responsible for lines from the meter that lead inside their house. Check with the utility to know where their responsibility ends and where the homeowner’s begins. The best time to do this is before a repair is needed.

What do utility line warranties cost?

Typically, companies offering utility line warranty programs charge between $4 and $15 per month, depending on the type and the number of programs enrolled in. Depending on the company, the monthly fee covers up to $4,000 toward applicable repairs or replacements. Some plans have deductibles that must be paid by the homeowner toward each repair.

How often are line warranties used? Are they worth the cost?

Utility line repairs are rare. A study of water repair permits in San Fransico, a city with many very old homes, showed that less than 1 out of 300 homes had water or sewer line restorations or permits in a recent year. Utility line warranty advertisements quickly note that some repairs can cost thousands of dollars. However, many needed repairs are much cheaper, sometimes less than $500.

Additional things to consider before signing up for a utility line warranty plan:

• Many customers may never need to replace or have repairs made to a utility line. Copper water lines typically last 30-80 years, and copper electric lines may last 50-70 years. And if repairs are needed, paying out of pocket may often be cheaper than a warranty over time.
• Check with the homeowner’s insurance provider. Utility lines may be covered, or the coverage may be available as a rider on the policy for less than the warranty cost.
• Consumers living in neighborhoods more than 40 years old where pipes and lines are still the originals and some properties have had replacements may want to consider purchasing a plan.
• For telephone lines, most problems typically occur every 20-30 years.
• Many companies will not cover repairs to pre-existing conditions in the line and have provisions to inspect the insured line within a few months of the program start date.
• Talk with the company before spending money to know what is covered and how a condition is determined to be pre-existing.

What’s covered?

Electric, Natural Gas, and Water

Utility line warranties may provide partial or full payment for repairs to electric, natural gas, or water lines. These programs have an additional fee that may be billed separately or added to the monthly utility bill. Many programs cover problems such as cracks in natural gas and water lines, aging electric lines that could cause outages inside the home and the lines (except gas) that travel from the curb to the home.

Telephone

Many local telephone companies offer inside-wiring maintenance plans. Some programs include a replacement telephone or telephone jacks. Consumers should gather as much information as possible to make a well-informed decision before signing up for a plan.

Who can help?

For more information on the available warranty programs, customers may call their local utility company. Before signing up for a utility line warranty program, consumers should learn about the company through a review service like the Better Business Bureau at www.bbb.org.