Although polybutylene pipes were initially regarded as a miracle product, as time went on, it was more and more apparent that polybutylene pipes had one big problem. It is important to research insurance options if you have these pipes in your home.
Unfortunately, the answer to this question is more difficult to uncover than I initially thought. The reasoning for this lies in the difference between an insurance agency and an insurance company.
Geico is an insurance agency that works with various insurance companies. As an agency, Geico does not determine whether or not polybutylene pipes would be covered by the associated insurance companies.
Geico Do Not Determine Coverage
Through the customer service section of the Geico website, I sent a message explaining that I would appreciate information regarding Geico’s policies relating to covering polybutylene pipes.
A customer service representative responded quickly, apologizing and explaining that as an insurance agency and not an insurance company, Geico does not underwrite the policies and, therefore, they do not determine coverage.
Insurance Agency vs Insurance Company
An insurance agency is defined as an individual or company that has made an agreement with an insurance company to sell the company’s product in exchange for compensation.
So, by contrast, an insurance company is an entity that handles the underwriting of insurance policies, the paying of claims, and the burden of the risk associated with the company’s policies.
An analogy that helps to explain their differences involves a selling stand and its supplier, a bakery.
The selling stand would be the agency, while the bakery would be the company.
The bakery handles every single step and risk associated with the production of the goods.
The stand would handle the advertising of the stand as well as the exchange of currency involved in selling the goods.
The bakery and the stand work together to work towards a common goal: selling the bakery items.
The workers at the stand would be paid by the bakery, but the stand has no control over the quality, types, and numbers of the products. This would all be handled by the bakery.
This example lays out how Geico handles the advertising and selling portion of insurance, but only its company, which develops the insurance policies, can determine coverage.
Will Insurance Companies Cover Polybutylene Pipes?
It is possible that the insurance companies associated with Geico will cover polybutylene pipes. However, if they do, the cover will likely be limited or come with a high premium or conditions, like having to replace the pipes in x amount of time.
The more likely scenario, however, is that the pipes and any damage that would be linked to their failure will be excluded. This is because the pipes are destined to fail, making this a much greater cover risk.
If you are looking at buying a house with polybutylene pipes, then think very carefully about the insurance ramifications as well as the other potential risks.