Realtor Training: Lesson 3: Service Line Coverage. How can your buyers get it and what does it cover?

We represent MANY homeowners insurance companies, so we have a good idea of what the home and auto insurance marketplace looks like.

A couple years ago, one insurance company came out with a coverage called “Service Line.”  Now, more and more of our companies are offering it. This is good news for homeowners across Colorado!

Question: What is service line coverage and is it important?

Answer: Most homes have power lines, phone and cable lines, water and sewer pipes and more under their yard.  The homeowner is responsible for paying for damages to these.  Service line coverage is insurance against unexpected expenses related to the damage of service lines on your property.  It covers the potentially costly expenses of excavation and repair of underground wiring and piping.

Damage to service lines is specifically excluded on a homeowners insurance policy.  The only way that you can get coverage is if you buy the “Service Line/Buried Utility Lines” coverage endorsement on the homeowners insurance policy.

In the old days, no homeowners insurance company would sell an endorsement like this.  These days, many homeowners insurance companies are offering this.

What types of service lines are covered?

Different homeowners insurance companies might have different coverage limitations.  Here are some types of service lines that could be covered:

-Power Lines, Gas, Water, Sewer, Cable/Communication Lines

How much does Service Line coverage cost?

Safeco is one of our companies that offers this coverage.  $10,000 of service line coverage is $30/year.  Not too bad!  We highly recommend it for every home, ESPECIALLY for older homes.

Remember, different insurance companies have different restrictions.  When in doubt, ask the insurance agent.

Make sure that your client doesn’t go online to buy cheap homeowners insurance.  The company that they buy the insurance policy from most likely will not offer this coverage.  If they do offer the coverage, the homeowner won’t know what it is and will not understand why it is worth it to pay the $30/year extra for it.