Protection against pipe failure

Sunday, March 5, 2000

Buying insurance is a crap shoot. Except for life insurance, where your heirs will eventually collect, there are no guarantees you'll recoup money invested in an insurance policy. In fact, you hope you never collect.

Even so, consumers buy all sorts of insurance. It's mandatory for your car, advisable on your home, and available on almost everything else, including your water pipes.

United Water Resources has begun offering its North Jersey customers a service called "LeakGuard," protection against pipe failure between the curb and your water meter, a stretch most consumers incorrectly assume is the water company's responsibility.

Although the word does not appear in any United Water promotional materials, LeakGuard is insurance. Spend $4.50 a month -- $54 a year -- and your friendly, local water company will pay for all repairs, right down to the landscaping.

In many ways, LeakGuard is similar to Bell Atlantic's Guardian Plan and Public Service Electric and Gas Co.'s WorryFree Service Contracts, and that's not a coincidence, said United Water's Rich Henning. "It's basically modeled after those two."

With the phone company, the $2-a-month Guardian fee covers diagnosis and repair -- including labor and materials -- of your inside telephone wire and jacks.

Public Service started several years ago with a $39.95-a-year WorryFree plan for gas furnaces, and now has plans for labor and replacement parts for other major gas and electric appliances.

In each case, a consumer must weigh the cost vs. the potential risk.

With LeakGuard, it depends how likely it is that a water pipe would burst under your lawn, turning the carefully manicured expanse into a soggy mess.

United Water says these types of problems happen "more than once a day in this area."

But the company has 180,000 customers, so only about two-tenths of 1 percent need these kinds of repair each year. The numbers are similar at the Philadelphia Suburban Water Co., which introduced a similar program, "Pipe Guard," two years ago, and at the Passaic Valley Water Commission, which has no formal repair insurance program.

That means the odds of your facing a costly pipe repair are slim. But if you are one of the small number of unfortunates, and get hit with a bill for $3,250 -- cited by United Water as a "typical" charge -- the $54-a-year insurance is a bargain.

In deciding whether to sign up, consumers should weigh their risk factor, said Rob Robinson, vice president of customer services at Philadelphia Suburban.

If your house was built in the past 10 years with a good grade of copper pipes, the slim chance of having a problem is even slimmer, he said. But if it was built during World War II, when galvanized pipes were used -- "they're corroding as we speak," Robinson said -- coverage might make sense.

But there is no clear-cut rule of thumb for most others, including those living in homes built before the war, he said.

If you live in Passaic Valley Water Commission territory, don't worry. Although the agency doesn't offer a program similar to LeakGuard, it does handle emergency repairs and bills customers to recover its costs, said Executive Director Joseph Bella. "If you ask us, we'll come out and fix it."

The average cost is around $1,600, and the commission allows customers to pay over a year or two, Bella said.

The tab is less than what's cited by United Water because most properties in the PVWC service area "are relatively close to the curb."

In Bergen County, where many houses are set far back from the street, having a backhoe come in and dig up 100 feet of landscaped lawn could cost as much as $5,000 to $6,000, Henning said.

LeakGuard was created in response to questions raised by the company's customer advisory panel, which asked why United Water couldn't provide the kind of service offered by other utilities, Henning said. "We researched it, and launched LeakGuard last fall."

One aspect of their research was whether such repairs were covered by homeowner insurance, and the answer was "no," Henning said. It's the owner's responsibility.

(Similar rules apply to telephone and electric lines. The phone company is responsible only for bringing wires into your house; the electric company controls wires to the point where they connect with the service entrance cable outside the house, plus the meter. The rest are the owner's responsibility.)

One other factor to consider: the peace of mind of not having to search for someone to handle an emergency repair, especially on a weekend or holiday.

Several years ago, my gas furnace shut down about 5 p.m. on Christmas Eve, just as about 30 friends gathered at my house for an annual party.

I was very happy to have WorryFree coverage, because a repairman arrived within an hour and, while the guests partied upstairs, went about his work restoring the heat -- all at no cost to me.

On the other hand, I've had wire coverage for years and never needed a telephone repair that I couldn't handle myself.