Dear Watchdog: You have probably dealt with this before, but I have not read it. I get advertisements about the need for water line insurance covering the line from my house to the meter. I have no idea if it is legitimate or if the coverage they are offering is adequate for the premium. – Stephen D. Finstein of Garland.
Yes, Stephen, I’ve studied water and sewer line warranty companies, first in 2012 and then again in 2015. Time for an update, especially since one of the two leading companies, American Water Resources of Texas, has mailed thousands of flyers to North Texans in the last several months.
One company, Service Line Warranties (before it was bought by HomeServe USA,) signed a 2015 contract with the city of Dallas that only lasted a few months. With the city’s permission, the company sent out mailings using the city logo and signed flyers that were signed from “the city of Dallas.”
There was so much backlash from city residents that the city abruptly terminated the contract only four months after it went into effect. The city repaid the company $325,000 of the $450,000 licensing fee.
The city also gave up a 75-cent per month royalty payment for every new account. And there were bonus payments slated to go to the city from $60,000 to $153,000 depending on how many homeowners signed up.
A real problem?
Consumer-conscious folks wanna know: Is this a waste of money?
The flyers I saw advertise a $3.49 monthly water protection fee, and in return, if your water pipes break on your property either all or a portion of the repair cost will be paid by American Water Resources.
For $12, you can pay monthly to protect your sewer line and your water line.
The flyer warns that the water and sewer lines from your property line to your water meter are not covered in most homeowners’ policies.
I contacted American Water Resources for this story because of their latest massive mail drop. Company spokesperson Alyssa Bauer replied that “we won’t be able to fully participate” in this story, except to say the company sells its services across the nation, including Dallas, but without “an official partnership with the city of Dallas.”
Another major company in the water/sewer line protection business is HomeServe USA, also known as Service Line Warranties.
AWR and HomeServe/SLW fight it out for partnerships, which could include city governments and utilities.
In contrast to AWR, HomeServe USA/SLW answered every question I had and provided me with a list of DFW area cities that partner with the company to promote their products. (A full list of area cities that partner with HomeServe USA/SLW is in the accompanying sidebar.)
Consumers must realize that these promo mailings are not from the city, and the service is optional.
While researching this report, I found an out-of-date Dallas city hall webpage advertising that “City teams with Service Line Warranties for private line repair program.”
A city official told me the page was up in error and would be removed.
HomeServe USA/SLW has 480,000 Texas customers in 50 of its partner cities, company spokesperson Myles Meehan told me.
Aside from El Paso, Arlington is one of HomeServe USA/SLW’s biggest cities. Arlington is in its eighth year partnering with the company.
Early on, relations were rocky. The city received numerous complaints, Arlington Water Utilities Assistant Director Craig Gantt said. Those problems ended and service has improved, he said.
About 10% of Arlington residents subscribe. The company has sold about 25,000 total policies, meaning some have bought more than one policy.
Gantt says he pays for the services at his house: $5.62 a month for water, $9.58 for sewer and $13.95 for indoor plumbing.
Prices vary, spokesperson Meehan said. And as is the case with most warranty policies, there are exceptions to what’s covered and limits to how much the company will pay.
In return, the company donates $60,000 a year to the city’s Care & Share financial assistance program for residents.
What should you do?
Wanna know the odds? Checkbook.org studied how many properties used the warranty. Their findings? Less than 2 percent of homes they surveyed had water or sewer claims.
The non-profit organization suggests finding out what’s covered and not covered.
How old are your pipes? Any problems with them?
Should you get it? Or not?
According to Checkbook.com, gauge the odds.
If 1-2% of people use it, is it worth it? (In a blog post, HomeServe USA/SLW disputes the findings.)
How old is your home? If built before 1950, pipes could be older and susceptible to wear and tear, leaks, or tree-root invasion. Newer construction in newer neighborhoods may not have this issue.
Explore with your insurance agent your coverage.
Check company review sites like the Better Business Bureau and see what kind of problems customers are reporting.
The Watchdog calls this one a roll-the-dice gamble. You gotta know when to hold them, know when to fold them, know when to walk away and know when to run.
These area Texas cities partner with HomeServe USA/SLW:
Denton County District 1
Source: HomeServe USA/Service Line Warranties
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