Many homeowners are surprised to find out that these ‘service lines’ are their responsibility. If they get damaged, it can be expensive — and repairs are generally not covered by municipalities and may not be covered under standard home insurance policies.
The Insurance Blind Spot
Underground service lines are not generally covered under your home insurance policy, often leaving homeowners on the hook to maintain them and pay for any repairs or replacement out of pocket.
In many cases, endorsements can be added to your home insurance policy to cover service line repairs, up to a certain amount.
The Rise of Service Line Warranties and Endorsements
Although a 2021 Service Line Warranties of Canada survey found that some 66% of Canadian homeowners were unaware that they are financially responsible for repairs or replacement to service lines, many are also taking steps to purchase service line warranty coverage to ensure they are protected.
What is a Service Line Coverage?
Service line coverage is an extra option you can add to your home insurance policy. Some insurers offer service line coverage as an optional add-on endorsement, covering sewer/septic and water lines, as well as underground electrical, telecom, and ground-loop piping.
Most standard home insurance policies do not include these types of repairs, so many homeowners only find out about this gap when they get a large bill for excavation.
Many municipalities are also partnered with external providers, such as Service Line Warranties of Canada, to offer residents optional and voluntary coverage for the outside water line and sewer/septic lines, from the foundation wall of the home to the main sewer or water shut-off valve.
These plans may operate differently from traditional insurance policies and are often structured as repair service agreements.
Some policies may also cover any outdoor property damage caused by a service line failure or during excavation, such as landscaping or your driveway, or extra costs for temporary repairs, such as additional living expenses.
Sewer Backup Coverage vs. Service Line Coverage
| Sewer backup coverage | Service line coverage | |
|---|---|---|
| Type of coverage | Optional, add-on endorsement | Optional, add-on endorsement (or agreement with external provider) |
| What does it cover | Covers water or sewage damage inside the home caused by sewer backup, blockages, or overflow | Covers repair or replacement of outdoor water and sewer service lines between the home and municipal connection point |
| What does it pay for | Generally includes cleaning fees and the cost of replacing floors, walls or furniture in finished basements, for example | Generally includes excavation, pipe repair/replacement and damage to outdoor property during the repair process |
| Cost | Between $50-200/year | Less than $100/year |
| Coverage amount | Coverage amounts vary | Coverage amounts vary. Some SLWC plans provide up to $8,000 per repair incident, for example. |
Why Service Lines are at Risk
Water and sewer service lines can clog, leak and rupture — and in many cases, these problems happen without warning due to factors such as freeze-thaw cycles, soil movement, or tree root intrusion. Neglecting to address minor leaks over time can also lead to greater damage later.
Similarly, underground wiring or cables can deteriorate over time or develop faults over time.
In some Canadian cities, the age of the infrastructure in general is another concern. In many cases, pipes are decades old, putting them at risk of deterioration, corrosion and weakening due to factors like soil movement, temperature fluctuations and demand.
Some cities also have large inventories of aging homes with older pipes hooked up to these lines, and materials used in the past may be nearing the end of their lifespan. Clay sewer pipes may last roughly 50–60 years, while galvanized steel pipes are often estimated to last between 20 and 50 years. PVC pipes may last significantly longer under normal conditions.
As a recent MyChoice study found, more than 1 in 4 homes in Winnipeg were built before 1960, and nearly 9% need major renovations, which may include upgrades to aging plumbing or utility infrastructure. Cities like Montreal and Hamilton boast similar numbers. At the same time, the cost of making these repairs is rising.
Why Repairs Become So Expensive So Quickly
Due to their underground location, repairing service lines requires excavation, specialized labour and equipment and permits.
While the average water line replacement is $2,600, according to Brant County, the cost can vary widely, depending on the complexity of the repair. In some cases, water and sewer service line repair or replacement costs can balloon depending on the type and age of piping material, when there is severe damage or if the pipes are hard to access.
Key Advice from MyChoice
- Check your home insurance policy to see if underground service lines are excluded or if you can add coverage for them.
- Don’t assume sewer backup coverage protects the underground pipe itself. In many cases, it only covers water damage inside the home.
- Watch for warning signs such as slow drains, recurring backups, wet patches on the lawn, unexplained increases in water bills, or foundation moisture.
- Address small leaks or drainage issues early before they escalate into major excavation and replacement projects.