Is utility insurance worth it? Depends on who you ask
Are they a good deal?
Experts say: "Maybe not."
Local insurance agent
"It's a money maker for the utilities. Chance of a need is quite small," Shadie said. "The risk becomes higher in older homes. Settlements in our area multiply the risk but they are rare."
Another local insurance agent,
Local gas and water providers such as UGI and
Neither the utilities nor
"Each of our more than 500 partnerships with municipalities and utilities are all a little different, but have one thing in common -- a motivation by these entities to provide optional value-added services to residents or customers that meet a need many homeowners face," Meehan said in an email.
Licensed local contractors are dispatched to do the repairs as part of the coverage, with the work guaranteed for one year, he said
UGI spokesman
"These types of contracts are entirely optional," Swope said. "This type of protection may or may not make sense for a customer based on individual needs and circumstances, similar to the purchase of other types of insurance, service contracts or extended warranties."
All terms and prices are set by
"Whether a person should consider such coverage depends on a lot of factors, including age of equipment, income, the ability to cover the cost of repairs if there is a breakdown, etc.," he said.
UGI has 700,000 gas and electric customers in
"It can be quite costly to repair those if they should break due to age or tree intrusion," Goudsmith said. "It can be a significant cost to the homeowner."
Goudsmith said it's a "personal preference" if customers want to sign up for
He said
Another local water provider, American Water, offers similar insurance and service contracts through its own subsidiary, American Water Resources.
Many homeowners are unaware of their responsibilities when it comes to water line repairs, Szafran said.
"Most believe the repairs are the responsibility of their water service provider and/or their municipality, and many believe it is within the coverage of their homeowners insurance," he said in an email. "These repairs are actually the responsibility of the homeowner and oftentimes, they are not covered by homeowners insurance policies."
Pennsylvania Acting Consumer Advocate
First, she suggests they check who owns the service line and who is responsible for repairs.
She also recommends contacting their homeowners insurance providers to see whether or not service lines are covered or if they offer any supplement to cover the cost.
She said homeowners could do a survey of plumbers and contractors to find out how much it would cost to replace the lines in the worst-case scenario and if it would be better to set money aside for that rather than paying for insurance on a monthly basis.
"We try to get folks to do their homework because it's a significant monthly cost for some of these programs to consider and they should have all the necessary information," McCloskey said.
"We can say that some insurance companies offer similar coverage on an optional basis for an additional charge," Ruman said. "Our advice would be to compare the terms, conditions and charges if you are thinking about this coverage."
Contact the writer:
570-821-2115, @CVAllabaugh
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