Virtually the only time I see a house in need of water/sewer line replacement is this:
- Polybutylene supply lines from the street in use from 1978 to 1995 (the closer you are to 1978, the more problems they had with the pipe)
-Cast Iron drains in houses from the 1960's and before typically due to tree roots and with the older houses (1950 and beyond) the pipes nearing the end of their life expectancy.
- Extensive landscaping with heavy machinery traversing the yard where the drain is located
In modern houses using PVC drains ( standard for last 30 years or so) it is not near the hassle in many cases as they can scope the drain, determine where the break is, and just dig down and replace that section. The exception would breakage or tree root damage in numerous areas. Houses built since 1996 use PEX from the street for water supply and it is as close to problem free as you can get with plumbing. Older houses with copper may nearing or past their typical life expectancy however. You can verify what you have by entering the crawlspace, looking for the water supply pipe (typically on the front foundation wall) and see what they used. Copper is obviously Copper, PEX is a milky white, and Polybutylene is a gray. You can see what your main sewer lines are as well (typically 4" drain that will be at or near ground level leaving the foundation, also typically the front wall). White for PVC, Black for ABS, or Cast Iron.
(There are of course exceptions or flukes, no plumbing systems are perfect)
The insurance is cheap, but read the fine print. Warranty companies are not in business to pay out claims.