SUD May Offer Leak Insurance, Elects Officers
Thursday, March 30, 2017
by Leslie Lytle, Messenger Staff Writer
“I make a motion we pursue offering leak insurance to our customers,” said SUD commissioner Charlie Smith at the March 28 meeting of the Board of Commissioners of the Sewanee Utility District of Franklin and Marion Counties. Smith’s motion followed a lengthy discussion in response to a presentation by insurance provider ServLine. The board unanimously approved Smith’s motion, but a number of details remain undecided.
ServLine offers three levels of protection, $500, $1,000, and $2,500. “Looking at the past three years, the average leak cost the utility $335,” said SUD manager Ben Beavers. By the current SUD policy, the customer was responsible for half the amount.
“We’ve been asked to consider relief for a number of far higher bills,” board President Karen Singer pointed out, “but our policy doesn’t offer relief for leaks inside the residence.” A common cause of unintended high water use is water leaked due to a faulty toilet flapper. SUD’s policy only offers relief for leaks from the meter to the foundation. The ServLine policy covers all leaks beyond the meter, with the customer only responsible for an amount equal to the customer’s average bill.
“The incident rate for auto collisions is the same as the incident rate for residential water leaks,” said ServLine representative Gerry Harstine. “Sixty-two percent of Americans can’t afford a $500 emergency. Homeowners insurance won’t pay for high utility bills resulting from leaks.”
In addition to the level of coverage, the board will need to decide on how often a customer can make a claim—once per year or once every three years.
The coverage will cost customers between $1-$2/monthly, depending on the level of protection and claim frequency. Following a mailing to customers explaining the program, customers will have two months to opt out of the coverage.
Customers will also have the option of requesting additional coverage providing for water line repair ($4/month) and sewer line repair ($6/month). The customer will need to initiate the contract with ServLine independently.
The board will vote on the level of protection and claim frequency at the April 26 meeting.
Beavers will prepare a summary of the necessary changes to SUD’s Leak Adjustment Policy. Uninsured customers will be responsible for the full amount of the cost of leaked water, not just half the amount as is the case now. How often a customer can make a claim will depend on the term selected. There will be no lifetime limit.
SUD commissioner Art Hanson asked if the policy reimbursed customers for the sewer portion of the water bill beyond the average amount. Beavers will contact ServLine for clarification.
In addition to considering revision to the Leak Adjustment Policy, the commissioners also reviewed five other policies in conjunction with undertaking a full-policy review during the course of the next several months. The board reconfirmed without changes the policies on Roberts Rules, Commissioner Health Care, and Commissioner Travel Expense Reimbursement. The language of the Commissioner Training Policy will be adjusted to reflect Tennessee Association of Utility Districts (TAUD) requirements.
The board will review the TAUD recommended Ethics Policy for possible adoption. SUD is currently governed by the Franklin County Code of Ethics.
The board elected the following officers for 2017: Charlie Smith, president; Karen Singer, secretary; and Art Hanson, vice-president.