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Letter: Sewer insurance a good deal, for insurers
First Published Apr 29 2014 05:02 pm • Last Updated Apr 29 2014 05:02 pm

The Salt Lake City Department of Public Utilities recently mailed me an offer to buy insurance against sewer line repairs. For $83.88 per year, HomeServe promises to pay up to $10,000 if the sewer line from my house to the city’s line needs repairs.

Salt Lake City provides water and sewer service (in Salt Lake City and some adjacent parts of the county) to 67,000 homes. It issues sewer repair permits to about 300 of these per year. If all 67,000 signed up for the insurance their total premiums would be $5.6 million per year. HomeServe reports that its typical cost to replace a sewer line is $3,697. Paying that much for 300 sewers annually would cost them $1.1 million per year, 20 percent of its premium income. You can see why that insurance is profitable for HomeServe.

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To learn more about HomeServe, look at the May 2012 issue of Consumer Reports.

Noel de Nevers

Salt Lake City

Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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