Politics & Government

UPDATE: Royal Oak Approves Utility Repairs Coverage

Royal Oak City Commissioners endorse a program that provides access to utility line warranties to residents.

Coverage for water and sewer line repairs will be made available through the National League of Cities in partnership with Utility Service Partners, the commission decided after some discussion Monday at City Hall.

The Royal Oak City Commission has endorsed the city's participation in the National League of Cities (NLC) Sewer and Water Lead Warranty program.

"Many Royal Oak residents have issues with their sewers that serve their older homes and this is a program that allows those residents to obtain an insurance policy that will allow them to get cleaning and other repairs done on their sewer lead when they have issues," said City Engineer Matt Callahan. "It's a modestly priced program. There are very few, if any, companies out there that offer this type of insurance or a program that assists homeowners on a part of their home that your normal homeowner's insurance doesn't cover.' 

The NLC Service Line Warranty Program covers expensive repairs to external water and sewer lines on homeowners’ property. The program offers 24-hour, seven-day-a-week utility service line protection.

The program would cover up to $8,000 toward repairs and cost homeowners less than $10 a month, which can be a good value to residents who are suddenly stuck with the burden of a $7,000-$9,000 repair because tree roots have broken their pipes. Most insurance companies exclude such coverage from their policies leaving residents to pick up the tab.

Commissioner Jeremy Mahrle asked if any sort of evaluation of a property’s sewer line was done before a homeowner is allowed into the program.

"We don't (do an evaluation)," said Mike Chambers, of Utility Service Partners. "We do know that in some cases there's going to be a pre-existing claim and that just happens, but we mail to too many people to be able to do any kind of inspections."

In February 2012, the commission elected not to participate in the NLC program over concerns about the insurer’s ability to perform.

"This program has become incredibly successful, and is now available in 47 states and over 150 U.S. cities," said City Manager Don Johnson in a memo to to commissioners. "Huntington Woods, Berkley, Ferndale, St. Clair Shores and Pleasant Ridge and other surrounding Cities now participate in this program. Huntington Woods initially had a 35 percent response rate Pleasant Ridge 15 percent, and Berkley had over 1,000 residents sign-up for program."

Greg Rassel, director of Royal Oak's Department of Public Service, said he personally talked to other directors of public works in neighboring communities that participate the program.

"They have all been very satisfied," Rassel said. "It's been headache-free for them as far as the administration and they have had no complaints about claims not being paid or filing claims."

Coverage is paid month to month. Residents who elect to pay yearly receive a 10 percent discount on the rates. Participation in the program is voluntary and residents who elect the coverage can cancel at anytime.


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