Utility Line Protection Plans: Questions to Ask Before You Sign Up
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If you have received a letter or postcard promoting a service plan or type of “warranty” to cover utility line repairs on your property, you’re not alone.
A growing number of companies - including utilities and third-party vendors - offer “line protection programs.” For a monthly fee, these programs may act as a warranty of sorts to help cover the costs of repairing underground supply lines, utility lines within your home, or both.
A supply line brings water from a utility’s main - or electricity or gas from a utility’s distribution lines - to an individual home or business. Typically, any lines on the customer’s side of the meter are the customer’s responsibility.
In addition to these programs for electric, natural gas and water utilities, telephone companies have offered “inside-wiring maintenance plans” for a number of years.
Line protection plans are voluntary. Consumers are not required to purchase or keep them as a condition of utility service. Also, these plans are not regulated by the Indiana Utility Regulatory Commission (IURC).
If you consider enrolling in such a program, you should make a careful and informed decision. This includes:
- Reading the fine print,
- Making sure you understand what you are purchasing, and
- Considering the following:
What is the likelihood that your utility lines will have problems and need repairs?
If your home is more than 40 years old, if it still has the original utility lines, and if your neighbors have needed repairs, then you are at greater risk.
Does your homeowners insurance cover utility line replacements?
The only way to know is to read your policy, talk with your insurance agent, or both. If your insurance covers replacements, a line protection plan probably isn’t necessary.
Do you live in an apartment or other rental unit?
If you do, talk to your landlord and review your lease. Landlords are typically responsible for utility lines on rental property.
Does the policy cover pre-existing conditions?
In many cases, the programs will not. There can also be many different definitions for “pre-existing conditions.” If you consider signing up, make sure you understand exactly how the company defines a pre-existing condition.
Are there any hidden fees?
In addition to monthly or annual charges, a line protection plan may include a fee for signing up and/or an early termination penalty if you withdraw. Reading the fine print is crucial. So is questioning the company about anything you don’t understand.
Do you know exactly what is and what is not covered?
Is there a deductible? Are there maximum limits on how much a plan will pay for repairs? Are there any exceptions or instances in which the company is not responsible? Again, reading the fine print is crucial.
If you need repairs, who does the work?
Does the company have its own service employees? Does it have contractors? How much flexibility will it give you in choosing a contractor?
Is the vendor reputable?
Checking with your local Better Business Bureau, Angie’s List, and other resources is always a good idea.
The decision on whether to enroll in a voluntary utility line warranty plan is entirely up to the consumer based on his or her unique circumstances. This fact sheet is intended as a general overview of items for a consumer to consider when making such a decision. It is not intended to serve as legal advice or as a specific recommendation on whether a consumer should or should not enroll.
Indiana Office of Utility Consumer Counselor
115 W. Washington St., Suite 1500 South
Indianapolis, Indiana 46204
Voice/TDD: (317) 232-2494
Fax: (317) 232-5923