That water line warranty offer that came in the mail? Shred it

Written by Andy Wise on February 14, 2018. Posted in Wise Advice.

The mailers are out again. They’re from multiple companies. You have multiple questions. Let me answer them.

Multiple companies are sending unsolicited mailers to homeowners nationwide, touting water line warranties. The offers come in different terms and conditions, but they all offer some kind of multi-year water and sewer line protection. For a monthly fee, they claim to guarantee coverage to a certain limit (typically $5,000) on any water or sewer line damage that is determined to be the homeowner’s responsibility. Some of them offer an additional coverage limit if roadway repairs are necessary.

The companies are pitching these offers under the premise that your homeowner’s insurance will not cover water or sewer line damage.

Let’s set a few things straight about these offers:

Is it true my homeowner’s insurance will not cover water or sewer line damage? YES. In most cases and in most municipalities, your homeowner’s policy does not cover the portion of the water/sewer lines running between your water meter and your home.
Are the water line warranty offers legitimate? Some of them are. HOWEVER…
Are there significant limitations to these water line warranties? YES. According to the Better Business Bureau’s examination of these warranty offers, some or all of them carry these limitations: a) They limit your choice of contractors. In some cases, you can’t even hire your own contractor. b) They’re voided in flood zones. If you’re strongly considering one of these, be sure your home’s not in a flood zone. The offers typically require a one-year commitment. You sign, you’re locked in…and they’re not checking (nor do they care) if you’re in a flood zone. c) They’re voided by pre-existing conditions and ‘acts of nature’. The BBB indicated that gives the warranty companies a lot of wiggle room to deny your claims.

If you’re still taking these water-line offers seriously, ask the company behind the mailer you received what kind of money-back guarantee it offers. Be aware that guarantee, if there even is one, will be limited and may not offer prorated refunds if it’s executed beyond its date limit.

My #WiseAdvice: consider setting aside a home repair emergency fund instead of gambling on one of these water-line warranties. Come up with an amount you can set aside each month and lean on it for repairs like these. That way, you would have no restrictions on which contractors you choose.

And you could feel better about tossing that warranty offer in the trash.