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Insuring utility lines (electric, water, sewer, etc.)
Old 06-20-2017, 04:06 PM   #1
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Insuring utility lines (electric, water, sewer, etc.)

For the last few months the utility companies have been sending us notices that they will no longer maintain lines from the street to their meter on the house. While this is not new for the water line (whose meter is at the street anyway) it is new for the phone, electric, and natural gas company. Each one now encourages people to "subscribe" to a service that will cover any expenses incurred for maintenance/repair for about $6 a month, conveniently added to your monthly utility bill. This is for each separate utility, so totals about $216 a year for gas, electric, and water/sewer.

The insurance company that insures our house and cars recently started offering a rider to the homeowner's policy to add that same coverage for $70/year, or about $5.33 a month. I bit on it because we did have to pay for a new water line a couple of years ago to the tune of $3,400.

But it does say a lot about how profitable those "maintenance" charges must be for the companies offering them.
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Old 06-20-2017, 04:19 PM   #2
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Something else to look at:
Our last house had such a long driveway that the utility lines went from a pole on the street to another pole (also theirs) near the house. The lines from that pole to the house were less than 100 feet. So when there was a problem like when a tree fell on the line between the street pole and the pole near the house, it was their problem, not ours.
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Old 06-20-2017, 04:23 PM   #3
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So when there was a problem like when a tree fell on the line between the street pole and the pole near the house, it was their problem, not ours.
That is what is changing. Now it is the customer's problem.

Our utilities are all underground so that lowers the risk considerably but our previous house had overhead lines and lots of trees to fall on them.
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Old 06-20-2017, 04:25 PM   #4
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Yes, clearly, they are making a lot of money with those convenient insurance deals. These things almost never break, so it sounds like you already had your lifetime event and so there is no need for further insurance

Seriously though, I know things do happen on occasion, but I have owned my house for xxx () years, and I own 10 rental properties, and I have yet to have any gas, water, electric, or sewer lines go bad on me (knock on wood). I HAVE had to replace phone and cable service wires, but that's because those are buried just an inch deep and tend to get busted by zealous gardeners () Those are fixed for free by the phone and cable companies.

Bottom line: I self insure
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Old 06-20-2017, 04:49 PM   #5
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I would contact my state utilities commission and complain. It may not do any good, but you will feel better. I would also complain to my local legislators.
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Old 06-20-2017, 05:21 PM   #6
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The telephone company used to try to get me to "insure" the phone wiring inside the house. My gas and electric companies try to get me to "insure" against appliance failure. Scammers all.
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Old 06-20-2017, 05:43 PM   #7
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We did have a gas line go bad. I didn't even know it. I came home one day and found that the gas co had replaced the feed line from the main up to my meter. They used some sort of electronic sniffer to determine it was bad. No charge. So sometimes utility feeds do go bad. That was about 20 years ago. 40 plus years of home ownership and I think that was our only incidence.
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Old 06-20-2017, 06:04 PM   #8
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When we built this house the water main i think an inch and a quarter ran me 3200. The old home had a lead skinny water main. That was in march 2011. That came with a 15 year guarantee. I took gas and sewer line protection. Bad deal maybe, but i like insurance.
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Old 06-20-2017, 06:15 PM   #9
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Where we live, the lines up to the meter belong to the utility and are their responsibility. Our water company wants to insure our water line from the meter to the house, about fifty or sixty feet. If we had a leak, I would just dig it up, splice it with a coupler and a bit of glue and cover it back up. It helps that our water lines here in Central Texas are not much more than a foot or two underground and are PVC. My wife gets worked up over this kind of stuff, it gives her something to worry about. I put her mind at ease when I reminded her that I used to work on a golf course and have put in hundreds of feet of water line much bigger than a one inch main. No gas here in our part of the sticks.
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Old 06-20-2017, 07:55 PM   #10
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Old 06-20-2017, 08:53 PM   #11
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Originally Posted by braumeister View Post
Something else to look at:
Our last house had such a long driveway that the utility lines went from a pole on the street to another pole (also theirs) near the house. The lines from that pole to the house were less than 100 feet. So when there was a problem like when a tree fell on the line between the street pole and the pole near the house, it was their problem, not ours.
the Standard demark point for above ground electric service is the splice between the cable coming out of the mast and the line from the pole. (Or put another way between lines you have to provide and those provided by the electric company.) The company may have wanted to sell you insurance on the lines in the mast and down the meter box to the first disconnect. Now underground service can be more complex.
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Old 06-21-2017, 05:16 AM   #12
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The water line from the street to inside my house is over 150 years old. I recently--and reluctantly--bought in insurance (~$3.50 a month) for it. A few neighbors have had theirs replaced to the tune of $2K.
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Old 06-21-2017, 06:58 AM   #13
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I look at it this way: Paying $70 a year for every potential $2K-$3K repair bill I could theoretically ever incur would be MUCH more costly than just paying the bill for those rare occurrences when they happen.

Same with high-profit "extended warranties" retailers try to sell you on purchases. Most appliances won't break during the warranty period, so statistically you're guaranteed to lose, even if one or two do fail.
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Old 06-21-2017, 08:27 AM   #14
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It is always important to look at the fine print of these. The insuring requests I receive from the utility company (a) are on the utility company letterhead, but actually another company provides the insurance, (b) require you to sign up using an automatic renewal method, and (c) if you want to cancel you must call a particular number to request cancellation... these things raise red flags for me.
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Old 06-21-2017, 09:04 AM   #15
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Originally Posted by Walt34 View Post
For the last few months the utility companies have been sending us notices that they will no longer maintain lines from the street to their meter on the house...
I've heard of utility companies offering insurance to cover phone lines inside the house or water lines from the meter to the house, i.e. lines that are clearly the responsibility of the homeowner. But I've never heard of utility companies transferring maintenance responsibility to the homeowner for lines on THEIR side of the meter. Maybe that varies by state or municipality, but everywhere I've lived, the utility company is responsible for line maintenance to the meter.

Was there some legislative change that allowed this? Was there a corresponding $6/mo reduction in the base charge?
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Old 06-21-2017, 12:26 PM   #16
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Was there some legislative change that allowed this? Was there a corresponding $6/mo reduction in the base charge?
I'm not aware of any legislative change but as someone else suggested I'm going to contact the Public Service Commission and ask. And don't be silly, of course there was no $6 reduction.
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Old 06-21-2017, 01:09 PM   #17
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I'm not aware of any legislative change but as someone else suggested I'm going to contact the Public Service Commission and ask. And don't be silly, of course there was no $6 reduction.
I didn't think so, but that actually might have made sense... a financially neutral transfer of maintenance responsibility. Otherwise, if it was me, I would have been all over the PUC and other government bodies before buying the insurance. I don't think they can just unilaterally make that change.
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Old 06-21-2017, 02:33 PM   #18
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I would look it like an extended car warranty. If you don't think you could "dip in" to pay for an unexpected (or at least remote) failure then it could bring you peace of mind. On the other side of that argument, if you can afford said repair and it not result in a financial gain, then I would vote "NO".

Our home is almost 40 years old and the only renovations have been interior things...really nothing done on the exterior (although the roof is only a couple of years old). I estimate that our "normal" maintenance costs (or budget, per se) is about 5K a year. I also "plan" for 10K issues that I imagine will crop up in the next couple of years so these unexpected expenses won't be a surprise.

As to them "not being responsible" anymore, that does sound fishy. Will they be releasing the easement back to you? I would guess not...
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Old 06-21-2017, 03:07 PM   #19
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Note that if you do the math the 3.50 per month and a 2000 dollar cost to fix work out to one fix every 47 years. Since they want to make a profit it suggests that the average interval of needing a total fix is well over 50 years. ( If the average cost is higher the interval is longer). Of course there are two ways to handle this, pay the cost or build your own fund to self insure. (With such a long interval you may move before a fix is needed so that the self insurance leaves you with the fund rather that that amount going to the insurance compay)
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Old 06-21-2017, 05:02 PM   #20
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My response would be "I'll pass, if it breaks I'm sure I can figure out how to fix it myself after some trial and error...". If they're calling it my property and my responsibility (as they must if I'm the one insuring it), then it falls under the rest of my "home" and I'm legally allowed to work on it myself with no training, licensing, or other requirements being needed. That should make them very comfortable...
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