I recently received a mailing from the New York City Department of Environmental Protection (DEP) promoting their partnership with a New Jersey-based company, American Water Resources (AWR), to offer me a water and sewer service Line Protection Program.
The DEP promotion states that this voluntary program is designed to protect me from the unexpected costs of service line repairs as "Most homeowners are not aware that they are responsible for all of the costs associated with repairing damaged water or sewer service lines that run from their building’s exterior to the municipal service lines in the street. These repairs are not covered by most homeowners insurance policies and can cost thousands of dollars....As a homeowner and DEP customer, you can enroll in the protection programs, and AWR will take the responsibility of paying for service line repairs off your shoulders."
A quick look at the cost of this service protection indicated it was not prohibitively expensive with an annual cost of just over $150 with monthly rates of $12.96 ($4.49 for water line protection and $8.47 for sewer line protection) with such charges to be included in your DEP water and sewer bill. I thought to myself, "Hey, you never know when a water or sewer line problem might happen requiring expensive repairs so perhaps maintaining a service contract with a 24-hour emergency number and the guarantee of a prompt response and repair would not be a bad idea."
So far so good. Then I took a quick look at the program's "terms and conditions" whereupon I found that AWR specifically laid out some 30 instances of water and sewer line problems and issues, which they state they will not pay to repair including, but not limited to, any repairs not resulting from normal wear and usage, any repairs required as a result of a natural act (flood, earthquake, hurricanes, landslides and the like), repairing anything caused by defective materials, restoring garden, shrubs, trees or structures damaged or removed by any authorized water or sewer line repair, thawing and sectioning of your water or sewage line,....the list of problems not covered by AWR in this program just goes on and on. A lawyer friend of mine called this fine print section of the terms and conditions a "killer" and that the myriad of stated exclusions should make anyone think twice before signing up for this coverage.
On the other hand, the only information AWR provides regarding what they will be responsible to pay consists solely of the following very general (and vague) statement that "AWR will pay for any repairs to any breaks or leaks in my water line or any breaks, clogs or blockages to my sewage line resulting from normal wear and usage."
I then called the AWR 24-hour hot line at 888-300-3570 in an attempt to get some clarification as to exactly what type of repairs would be covered under this program. My call went unanswered for some 20 minutes due to "high call volume," which I found interesting as it was 3:45 in the morning. When I did finally contact AWR, much later that day, they simply told me to refer to the terms and conditions in the flyer provided by DEP.
The bottom line is that AWR takes great pains to outline exactly what it will not cover and yet offers only a general and very vague (normal wear and usage) description of those repairs it will pay for. Thus, as with any other insurance or warranty program — buyer beware! You should do your own due diligence to learn what is and is not covered and what exceptions apply. If your water and sewage lines are old but still functioning without defect, then perhaps this type of coverage is worth your while. On the other hand, those homes with brand new water and sewage lines, such as the residences on West 11th, 12th and 13th Roads where the street raising and new bulkhead project was centered, would not make this type of coverage cost efficient.
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