Is utility-line service plan worth buying?

Recently, the Better Business Bureau received calls from people inquiring about offers for service plans to cover utility line repairs. Homeowners received letters promoting coverage to protect from costs associated with repairs or replacements of leaking or broken gas, electric, water supply, drain and sewer lines.

The letters may be misleading because they appear to be billing statements from current utility companies, the state of Ohio or residing county or city offices. The notices are actually from private businesses offering warranty or insurance services.

The Office of the Ohio Consumers’ Counsel (OCC) states generally utility companies are responsible for lines along the street and property owners may be responsible for lines leading to and inside homes (confirm with your utility company). While warranty programs exist, consumer-responsible line repairs occur infrequently.

If you’re considering a utility line warranty, the BBB and the OCC recommend you:

• Remember you may never need to replace or repair your utility line.

• Talk with neighbors to determine if they’ve had to make repairs. Bear in mind the older your home, the greater chances of utility line problems.

• Review your homeowner’s insurance policy to make sure it doesn’t already provide such coverage.

• Keep in mind many companies won’t cover repairs to pre-existing conditions.

• Determine who’ll perform repairs. Does the company employ contractors or can you hire one yourself?

• Read the service contract carefully and make sure you understand everything, including exclusions, monthly costs and sign-up charges, before purchasing.

• Check the company out with the BBB. Visit www.bbb.org or call (937) 222-5825 or (800) 776-5301.

John North is president and CEO of the Better Business Bureau

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