Utilities and the Home Insurance Policy

Public utilities that provide you with necessary services, such as gas, water, and electricity, are considered part of the basic necessities of life. They are also an important aspect of home ownership. In fact, when budgeting your living expenses, you likely include a line item for all the various utilities that you need to pay each month. However, have you ever considered what happens if there is damage to your utilities? Because your private property is connected to a public utility, it can be confusing at times to understand exactly where your responsibility begins and ends with the utility company.

One of the key areas of confusion for homeowners is who owns the utility lines under their property. It’s probably understandable that utility lines under public streets belong to the city or the public utility, but it can be less clear who owns the lines underneath your land. Certainly, they are for your use and are metered so that you can pay for your usage each month, but generally, the underground utilities under your property are still the property of the utility company. Therefore, if you cause damage to the utilities, you can be billed for the cost of repairs.

Unfortunately, there is sometimes a bit of confusion regarding the ongoing maintenance of these utility lines. In South Carolina, The State is reporting a proposal by the city council to permit homeowners to purchase insurance specifically for utility line repairs. This came about because homeowners are in a conundrum, since the public utilities only perform maintenance and clear obstructions to lines in the public right of way, but often the work also is required on personal property. For this reason, homeowners have been seeking a cost-effective way to insure the necessary work on their property, as these maintenance items are not covered by the standard home insurance policy.

Another interesting situation with public utilities is the use of easements by companies that need to access homeowners’ property. It’s common for utility companies to have an easement that allows them the use of a portion of your property to access the underground lines or other equipment. Usually, a few strategically located homes in each neighborhood will have an easement on their property. If this affects you, be sure to understand the full legal ramifications. You will have strangers accessing your property from time to time, so understand what kind of legal liability that may impose on you and your home insurance policy’s liability coverage. The easement may also have an effect on your ability to sell your home if the potential buyers are not thrilled about the prospect of having people traverse their property to access utility lines.

Overall, utilities are a necessary and important part of life and home ownership no matter what city you live in- Dallas, Detroit, Denver, Las Vegas, Miami, etc. The benefits of modern public utilities and the services they provide cannot be overstated. However, along with the services comes a degree of risk and responsibility. As a homeowner, you need to understand what your obligations are and whether or not your home insurance policy will cover you should a utility line on your property become damaged or otherwise need repair. A good place to start is to review your home title or deed, which often describes any potential easements on your property. After reviewing the title, review your home insurance policy in light of the easements.

Facebook Comments