Friday, January 31, 2020

Village Board considers "No-fault sewer back-up insurance" for village sanitary utility customers

At the February 12th board meeting, the Village Trustees will consider purchasing "No-Fault sanitary back-up insurance".
Current village insurance only covers back-ups that are caused by the fault of the village (this is standard for municipal insurance). Current village insurance does NOT cover back-ups that are of no fault of the village (i.e. acts of nature such as excessive rainfall or flooding). In instances of "no-fault", the village is not liable and therefore would not pay for damages to private property.
The Village board will be considering insurance that would cover damages to private property even when the Village is not at fault, such as an excessive rainfall that caused the sanitary main to overflow and backup into homes.
This insurance is for the sole benefit of our sanitary utility customers who may experience sanitary back-ups in their homes/businesses. Claims are paid to the customer who experienced damage caused by backup of the sewer main. The cost of the insurance policy (about $1.75 per sanitary customer per year) would be passed on to the sanitary customers through a sanitary rate increase.
This WILL NOT cover back-ups that are caused by the private lateral that connects your home to the sewer main, this will ONLY cover back-ups caused by issues in the sewer MAIN. State-wide, about 35% of backups are in the sewer main.
State-wide, about 65% of backups are caused by issues in the private lateral. This proposed insurance coverage will NOT pay in these situations. Private insurance is available for damages due to back-ups in private laterals and is usually a relatively low cost add-on to your homeowners insurance policy (check your policy!)
For reference: Based on the national average for sewage cleanup and restoration of $7 per square foot, cleanup and restoration of a 1,700 square foot basement is estimated at $11,900.