City urges caution on water pipe insurance
SANDPOINT — City officials have issued a consumer warning concerning a water line insurance company that plans to market its policies in the area. They caution residents to do their own research before signing on.
"American Water Resource's letter offers to sell customers a type of insurance policy that would defray the cost of repairs in the event that a customer-owned water or sewer line should become damaged by a break or blockage. Customer-owned service lines are the underground water/sewer pipes running from the home to the meter connection for water and from the home to the sewer main for the sewer system. The city suggests that each customer review his or her current homeowner’s insurance policy to verify whether and to what extent these types of repairs are covered and make your decisions as personally warranted," according to a press release.
AWR is a New Jersey-based firm that has been in operation for more than 14 years, according to the company literature. While types of insurance plans and costs vary by market, AWR offers up to $5,000 in coverage for water and sewer line breakage on residential property for as little as $5 per month, according to the company.
Prior to making a purchase decision, homeowners should be aware of a couple caveats. First, AWR requires that any covered repairs be completed by its contracted repair services, so the insured cannot choose his or her own repair person. Additionally, even the "unlimited" insurance plans do not cover pre-existing problems or natural disasters, according to the Terms and Conditions section of the contract, making any claims subject to potential dispute. AWR does not pay for water damage to your sidewalks or landscaping. The coverage period is one year, and AWR charges an annual program fee in addition to the monthly installments.
"The city of Sandpoint wants customers to be aware that neither AWR nor its 'Water and Sewer Line Protection Programs' are affiliated with or endorsed by the city. For additional questions regarding water and sewer service line responsibility or repair, please contact the Public Works Department at 263-3407," city officials said.