The Expensive Pipe Problem: What is Service Line Coverage?

It is a homeowner's nightmare. You wake up to find a soggy, foul-smelling sinkhole in your front yard. Or perhaps your toilets stop flushing and sewage starts backing up into your bathtub. You call a plumber, and they deliver the bad news: the main sewer line running from your house to the street has collapsed due to tree roots or old age.

Then comes the second shock. You call the city, and they tell you: "That pipe is on your property, so it's your responsibility." You call your insurance company, and they tell you: "Standard policies don't cover underground utility lines."

Then comes the bill. Excavating a yard to replace a sewer or water line typically costs between $6,000 and $12,000, sometimes more if they have to dig up a driveway or sidewalk.

This is a massive coverage gap that affects millions of homeowners, especially those in older neighborhoods. To close it, you need a specific, modern endorsement called Service Line Coverage. This guide explains what it is, how it differs from "Water Backup" coverage, and why it is one of the smartest upgrades you can make.

The "Ownership" Gap

Most homeowners assume the utility company owns the pipes. The reality is that you own the lines running from your foundation up to the "connection point" at the street main.

• Water Lines
• Sewer Lines
• Electrical/Power Lines (underground)
• Gas Lines

Why Standard Policies Say "No"

Standard HO-3 policies cover the structure of your home. They exclude "land" and generally exclude damage to underground items caused by:

• Wear and Tear: Old clay pipes eventually crumble.
• Tree Root Invasion: Roots seek water and crack pipes.
• Rust and Corrosion.
• Freezing: Underground pipes can freeze and burst.
• Weight of Vehicles: A heavy truck driving on your lawn can crush a line.

Since these are considered maintenance or external forces, the standard policy pays $0 for the repair of the pipe itself.

Service Line Coverage: The Solution

Service Line Coverage is an endorsement that pays for the excavation and repair of these underground lines.

• Limit: Typically $10,000 or $20,000 per occurrence (which is usually enough for a residential line).
• Deductible: Often has a separate, lower deductible (e.g., $500).
• Covered Perils: Crucially, it covers "wear and tear," rust, and tree root invasion—things standard insurance never covers.
• Cost: It is incredibly cheap. Usually $30 to $50 per year.

Service Line vs. Water Backup (Don't Confuse Them!)

This is the most common point of confusion. You usually need both.

1. Service Line Coverage: Pays to dig up the yard and fix the broken pipe outside. It does not pay for the damage inside the house.
2. Water Backup Coverage: Pays for the damage inside the house if that broken pipe sends sewage backing up into your basement. As we discuss in our water damage guide, this pays to replace the carpet and drywall.

Scenario: A tree root crushes your sewer line. Sewage backs up into your finished basement.

• Without endorsements: You pay $10k to fix the pipe and $20k to fix the basement. Total: $30k out of pocket.
• With Water Backup only: Insurance pays $20k for the basement. You pay $10k for the pipe.
• With Service Line only: Insurance pays $10k for the pipe. You pay $20k for the basement.
• With Both: You pay your deductible. Insurance pays everything.

Who Needs It?

• Owners of Older Homes: If your home was built before 1980, you likely have clay or cast iron pipes. These have a lifespan of 50-60 years. You are living on borrowed time.
• Homes with Mature Trees: Large trees in the front yard are the #1 enemy of sewer lines.
• Anyone who can't write a $10,000 check today: For $40 a year, this transfers a massive, inevitable financial risk to the insurer.

Conclusion

Service Line Coverage is one of the best value-for-money products in the insurance industry. The risk of a line failure is high (especially in older homes), the cost of repair is exorbitant, and the premium is negligible. Check your policy today. If you don't see "Service Line" or "Buried Utility Line" coverage, call your agent and add it. It’s the only way to protect what lies beneath.