Warning Over Water Main Insurance Letter

A letter offering insurance for water main damage is making its way around the area, and it could cause people to spend money they don

Water valve

RENO, NV - It's not a scam, but it is a solicitation that warrants some scrutiny. A letter offering insurance for water main damage is making its way around the area, and it could cause people to spend money they don't need to be spending.

The solicitation is being shopped around by a company called HomeServe USA (HomeServe) and it correctly tells homeowners it is their responsibility to cover any costs from damages and repairs if a water service line breaks between their property and the street.

Patty LeFrenchi received multiple letters from the company which informed her they found that her property 'is not covered with Water Service Line Coverage' from the company. The letter also warns that a line buried underground on the property could fail at anytime.

"I was thinking because it was an older house, something could be wrong with the lines," she said.

But the warning bells rang in her head as she read the letter. LeFrenchi is a renter, not a homeowner.

"I wonder how they got my information knowing that it's owned by somebody else. They should be sending it to them directly and they shouldn't have access to those files."

The Better Business Bureau has several hundred closed complaints regarding HomeServe. Many people complaining they believed the letter was from a local government agency or utility company.

Despite the complaints, the BBB is stopping short of calling this solicitation a scam because as far as they can tell, HomeServe is offering a legitimate service.

At the bottom of the solicitation sent from HomeServe, the company says it "is an independent company separate from your local utility or community and offers optional service."

"It's just like anything else we receive in the mail," Tim Johnston, president of the BBB of Northern Nevada said. "We may not be getting as much as we use to in years past, but we still get solicitations and so it's just a matter of is this something that is of interest to you, that you can find useful?"

But this is where the problem shows up. The company is offering coverage for about $5 a month, but some homeowners may already have this coverage included with their current homeowners insurance policy. If they send HomeServe a check, they could just be spending money they don't need to be spending.

Insurance agents are sending out this warning; now is a good time to review your policy and make sure it covers everything you need it to.

"Many people reduced the coverage on their property back in 2008-2009 as property values fell," Mark Ashworth, president of the Reno/Sparks Association of Realtors and a licensed insurance agent said. "So it would be prudent to get an updated value on your home and check with your insurance agent to be sure that your coverage for that value is proper."

He recommends asking your agent directly if your current policy would cover damage and repair from a broken waster service line. Water mains can break for several reasons, including age and extreme heat and repairs can cost several thousand dollars.

HomeServe sends out these solicitations all across the country, and that has prompted several communities to send out warnings to their residents that this is not a company they endorse. However other cities like Salt Lake City have partnered with HomeServe to offer coverage to homeowners.

"If this is something that appeals to people, we would suggest you check it out thoroughly," Johnston said.


Comments are posted from viewers like you and do not always reflect the views of this station.
powered by Disqus
KOLO-TV 4850 Ampere Drive Reno, NV 89502
Gray Television, Inc. - Copyright © 2002-2014 - Designed by Gray Digital Media - Powered by Clickability 256527411 - kolotv.com/a?a=256527411