Insurance Offer Questioned

Consumers have contacted the Better Business Bureau serving Nebraska, South Dakota and southwest Iowa (BBB) regarding a mailing they've received from HomeServe USA. The mailings inform recipients that they are responsible for the maintenance and repair of their exterior water lines, leaving them liable for repairs which could potentially cost thousands of dollars.

Its an alert released after a Channel Six News Fact Finders Investigation.

The insurance offer provides an 800 number and a deadline to enroll in their Water Service Line Coverage. Some consumers have stated the mailings appear to be from a local government agency or utility. The BBB is advising consumers to review these notices carefully, particularly the portion that says HomeServe USA is an independent company separate from your local utility or community.

The BBB also notes that while the company is correct when they say homeowners are responsible for the maintenance and repair of their water lines "utility service connection to your home," the warranty coverage they offer is optional.

"Similar to any warranty, service plan or insurance policy, it is up to the consumer to determine its value and whether or not it's worth purchasing," said Jim Hegarty president and CEO of the BBB. "They should also be clear about what is covered under the policy offered, as well as what is not covered."

The BBB says that while some homeowners may not be covered for the line repairs offered by HomeServe USA, anyone who is uncertain should call their water department to avoid paying for duplicate coverage. You should also review your homeowner's insurance policy to see if coverage is already provided, as well as contact your insurance company to ask how this coverage would work in conjunction with your current policy.

Although HomeServe USA is headquartered in Stamford, CT, the company does claim a Post Office Box in Lincoln, NE. The Connecticut BBB's Business Review rated the company a "D," and noted that HomeServe USA has entered into consent agreements with the states of Kentucky, Ohio and Massachusetts. Both Kentucky and Ohio alleged that the mailing solicitations "generated confusion" and were "deceptive" in their appearance. According to the Business Review, the settlements should not be considered as an admission of guilt or a legal violation.

The BBB recommends the following tips to consumers who receive a call or letter from Home Serve USA or similar companies:

* Read the service contract very carefully and make sure you have a clear understanding of it, especially each of the exclusions, before agreeing to buy coverage. Do not purchase any coverage over the phone without seeing a contract with all details that were discussed verbally set down in writing.

* Make sure you're familiar with the company's cancellation policy in case you change your mind after signing up.

* Check the company's BBB Business Review at www.bbb.org to see if there are any unanswered, unresolved or unusual pattern of complaints that other consumers have noticed.

Better Business Bureau, Inc. (BBB) has been serving the region for more than 70 years and is a private, nonprofit organization dedicated to promoting trust between consumers and the business community. Accountability, education and recognition are key components to the BBB's mission of fostering trust in the marketplace. Today, the BBB has a membership of approximately 8,000 companies in Nebraska, South Dakota and southwest Iowa. Consumers are encouraged to report complaints and possible scams to the BBB. The BBB annually honors organizations and companies that demonstrate exceptional business ethics with the prestigious Integrity Award. As a matter of policy, the BBB does not endorse any product, service or company. For more information, please visit bbb.org and "Start With Trust."


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