It’s increasingly common in cities and towns across South Carolina for homeowners to be offered an insurance-like product to cover the failure of water and sewer lines on their properties.
Whether that makes financial sense can depend a lot on which water and sewer utility serves the area, because prices can vary tremendously, ranging from $2.80 monthly up to five times that price.
With any insurance coverage or service plan, key considerations are the potential out-of-pocket cost you’re paying premiums to avoid, the likelihood of having to file a claim and your ability to pay out-of-pocket if the need arose.
Some things are clear-cut. Home insurance, health insurance and car insurance can protect against financially catastrophic expenses, and in some cases they’re mandatory. But you can buy coverage, it seems, for just about anything.
South Carolina Electric & Gas, for example, offers nine different repair plans, covering everything from sewer lines to home appliances.
The Cayce-based utility’s water heater plan is a great example because it’s simple. It costs $6.95 a month, or $83.40 a year. It covers repair or replacement, due to regular wear and tear, of standard water heaters regardless of age. A new unit runs about $400, plus the cost of installation if you can’t do the job yourself.
At a glance, spending $83 a year to protect against an expense of hundreds of dollars doesn’t seem to me like a good risk/reward scenario.
With water and sewer lines, the focus is on the underground pipes connecting a home with the utility-owned lines near the street. The service lines are the homeowner’s responsibility, and repairing a broken sewer line in the yard, maybe under the driveway, could cost thousands.
Old lines can certainly fail, and tree roots do love sewer lines. The greater the distance from a home to the street, the longer the lines are, and the greater the risk.
Mount Pleasant Waterworks’ experience offers a snapshot of the likelihood of having a problem with a residential water or sewer line. The utility has nearly 5,000 homes enrolled in its service plan, and 2 percent, nearly 100 homes, have called for service.
Water-and-sewer service line plans typically cover repairs up to a capped amount, such as $5,000 or $7,000, and most cover only normal wear and tear — not accidents, like someone severing your line with a shovel.
Want your yard restored to the way it looked before a service line repair? Several plans charge extra for that assurance, although it’s included with Mount Pleasant Waterworks’ plan.
If the cost of this peace-of-mind is $33.60 a year, as it is for Grand Strand Water and Sewer Authority customers, that’s fairly low. If, however, the price is more than $200 a year, as was advertised in North Myrtle Beach in December, that’s a different scenario.
One practical option would be to put the money in an emergency savings account, instead. After all, things do break. If you don’t have insurance, you’re self-insuring, and that means saving money.
Charleston Water System and the city of Columbia are among those working with for-profit HomeServe USA. HomeServe gives utilities a cut of the service line protection money, often 10 percent or more, in exchange for access to utility customers who typically receive official-looking solicitations from Homeserve for the optional coverage.
North Myrtle Beach announced a deal with HomeServe in December, which worked out to a whopping $17.48 monthly cost for water-and-sewer line service plans. That deal, however, is “on hold indefinitely” according to city spokesman Patrick Dowling.
Here’s a look at monthly costs, in other South Carolina areas, for water-and-sewer line service plans. In some cases, temporary discounts are offered for new sign-ups.
Of course, you can’t really choose your municipal water-and-sewer provider. But the pricing can help figure out what’s reasonable. In some areas, SCE&G’s plan is less expensive than those offered by the local water-and-sewer utilities.
Over 10 years, the least expensive plan would add up to $336.
By contrast, the plan that seems to have existed only briefly in North Myrtle Beach would have added up to almost $2,098 over the same period.
Reach David Slade at 843-937-5552. Follow him on Twitter @DSladeNews.