The last 12 months or so have seen at least two examples of coverage for residential water service lines surface as retail insurance, backed by brokerage networks and supported by major underwriting insurers. The use of retail insurance (this is different to using an insurance company as an underwriter of warranties / service contracts, which is common) does exist elsewhere with some of the large industry participants, but is generally offered by exception where regulations demand it.
Example 1: ServLine in Tennessee
This is provided by SunBelt Insurance and backed by the Hannover insurance company as underwriter. It possesses affinity partnerships with Tennessee water systems such as the North West Utility District. Their model is to provide mandatory and / or optional coverage only via the utility, the insurance is not available independently. The insurance element does allow for cash reimbursement, and ServLine have leveraged that to provide leak adjustment payments. URL: http://www.nwud.net/servline-program
Note that ServLine possess an affinity relationship with the National Rural Water Association, in a manner similar as SLWA’s (now HomeServe) relationship with the National League of Cities.
Example 2: National Water Company in Washington State
NWC looks to be a collaboration of insurance brokerages who have an affinity partnership with the AAA in WA. There appear to be no formal utility marketing partnerships as of yet, although they are associates of the WA Association of Water and Sewer Districts. URL: http://www.nationalwatercompany.com/
Nicks View: Retail insurance can be a custom job to the state in which it is sold, due to the burdensome and fragmented nature of the regulatory landscape. Restrictions often exist on pricing, onerous restricted cash requirements may exist and product development lifecycles can be very long. I am unsure how providing these products as pure insurance can be easily scaled beyond state boundaries where national warranty competitors already exist and major utilities can commence their own programs without it being treated as insurance. That being said, we should not underestimate the power of local relationships in the brokerage world to develop these programs locally. The promotional video for ServLine on the NRWA site hints at this (URL: http://nrwa.org/affinity/servline/ ). Insurance also is a potential solution to the problem of water loss bill adjustment, which is, as a whole, weakly addressed by warranty providers.