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Orem homeowners able to sign up for service line insurance

By Genelle Pugmire - | Apr 26, 2022

Harrison Epstein, Daily Herald

Orem City Center is shown on Wednesday, April 13, 2022.

It’s every homeowner’s nightmare: broken sewer pipes flood the house and you find out it’s your responsibility to fix.

It’s been nearly 14 years since Chris Tschirki, director of Orem’s Public Works Department, had the sewer lines burst at his home. It cost him around $12,000 at the time to fix it.

As most residents know, those prices and materials have gone up in price significantly over the last decade. Those costs, particularly if you have to dig up asphalt to the main city line, can cost well over $10,000. Most homeowners aren’t readily prepared, or don’t have the ability to pull that much out of their savings account on a moment’s notice.

For the past seven years, Orem has partnered with Service Line Warranties of America, a HomeServe company, to provide specific insurance coverage for homeowners that covers the external sewer and water line up to where it connects with the city.

“The partnership with HomeServe has been great for the city of Orem. We have been able to educate residents, provide them an option for coverage, and ultimately save residents significant money from unexpected infrastructure issues,” said Steven Downs, deputy city manager. “This program will always remain optional, providing residents an opportunity to choose whether or not the coverage makes sense for them.”

During Tuesday’s City Council work session, Service Line noted they had passed the $1 million mark by taking care of 788 resident’s service line fixes.

“A million is a lot for a city this size. We use you as a model,” said a Service Line Warranties of America representative. He noted they also have a charitable arm which helps with pro bono work.

Two years ago, the council renewed the services contract. Tuesday’s presentation was a report on how Orem residents are responding to the opportunity to sign up for the service.

State law requires cities to notify homeowners in their community about public and private ownership of water and sewer lines. It was the Orem City Council’s intent not only to notify, but to let citizens know how they can protect themselves from potential liabilities.

The cost of exterior insurance varies depending on which lines you insure, it can cost from $4.07 to $5 per month.

In addition to their legal requirements, the city of Orem regularly receives calls from homeowners who have had a break in the water or sewer lines connecting their home to the water/sewer line in the road.

Most of these homeowners don’t realize that they are responsible for their lateral sewer and water line repairs. They believe those breaks are the city’s responsibility, but that’s not the case. Orem wanted to be proactive in helping homeowners prepare and/or protect themselves against these large expenses.

“As we researched what other cities did to address this growing problem, we learned about these partnerships that many communities have entered into. In these partnerships, the claim denial rates are very low, in the case of Service Line Warranties of America (SLWA) less than 1%, and the price is much cheaper than what is offered outside of these partnerships,” Downs noted. “We agree that at first glance it seems out of place and odd for a city to be involved. However, we continue to get calls from residents that are being blindsided by these repairs, and we want to do our best to educate residents about this responsibility before the break happens.”

This partnership does not prevent other companies from marketing their service to residents.

SLWA originally offered the city a commission on each resident who signs up. The city, though, asked that the company reduce the price to the residents by the equivalent amount and SLWA agreed.

The insurance is optional and can be signed up for, and canceled, at any time, according to Downs.

While Service Line works only through municipalities, residents work directly with the company. Headquartered in Pennsylvania, Service Line uses local contractors so they can respond in emergencies. With many homes in Orem reaching 40 years old or older, according to Downs, they will eventually have lines that fail and residents should be ready in case of emergency.

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