Water Service Line Coverage Confusion

Craig Nigrelli

Water Service Line Coverage Confusion

CREATED May. 10, 2013

Omaha, NE - A letter that blares "Attention - Douglas County Resident", is getting a lot of attention in the Omaha area and other parts of Nebraska. "It has created confusion among consumers who received it. " said the Better Business Bureau's Jim Hegarty.

The letter explains that the recipient/homeowner is responsible for the maintenance and repair of the exterior water line on their property and that repairing a broken line could cost you thousands of dollars without coverage.  There is a diagram of a house explaining that the costs of locating a leak are close to $500, replacing a segment of pipe nearly $2500, unless the homeowner takes out a policy with a company called HomeServe for water service line coverage.  The letter has the company name, a small picture of the state of Nebraska and a Lincoln PO Box.  Hegarty said, " there have been thousands of consumers throughout our region that have received this mailing and called us because they are confused about whether it's coming from our utility company and am I under some sort of obligation to do this."

State Farm Agent Matt Dougherty of Omaha says HomeServe is correct the water service line on your property is your responsibility.  He added, " things like corrosion, deterioration, rusting are not covered under a standard homeowner's policy. " 

We dug deeper and uncovered that HomeServe is based in Connecticut.  Hegarty took my letter and faxed it to his colleagues at the BBB there.  Since 2010, HomeServe has settled complaints with four different states : Kentucky, Ohio, Georgia and Massechusetts.  The company paid a total of more than $175,000, after those states accused HomeServe of "false, misleading and deceptive represenations".

So I called HomeServe in Connecticut to try to get some answers. Miles Meehan is the Senior Vice President.  He says "we currently serve 1.3 million customers. Obviously these customers who received these mailings in the past, understand our offer, once they've read the letter. "

Meehan went on to say HomeServe is an independent company separate from the local utility.  That's true. Still the message to Nebraskans from Hegarty, " you are under no obligation to do this." and State Farm Agent Dougherty added, " it's something I'd probably want to stay away from. "