Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
Nov. 27--An insurance company with a record of consumer confusion and accusations of deceptive advertising is papering Florida with direct-mail advertisements that look more like bills from the government.
The mailings warn that the recipient's home address "has appeared in our review" as being without insurance for the water line leading from the home to its connection with the water system. A repair or replacement, the letter goes on, could cost "thousands of dollars" and "burden finances in these difficult economic times."
Some have been confused, frightened and unsure what to do with the official-looking notice from HomeServe USA, whose mailing carries a response deadline of 30 days and shows a "status" of "pending." Should they pay the modest $4.99 a month and send the check to the "plan administrator" on the return envelope? And what if they don't?
HomeServe USA Senior Vice President Myles Meehan said the company is legitimate, serving 1.1 million customers in America and Canada, about 87,000 in Florida.
The company ran into trouble in other states where customers complained about the mailings, most recently in Iowa, where the attorney general's office formally warned against what it considered deceptive business practices.
Attorneys general in Ohio, Kentucky and Massachusetts have also gotten involved, acting on complaints of misleading solicitations.
In Florida, the attorney general's office said Monday that it is looking into complaints about HomeServe USA.
The company sent mail to 600,000 customers in Florida in November, Meehan said.
"There were some complaints in just a handful of states," Meehan said. "We worked with state agencies to improve our materials to make it more clear."
The mailing does advise customers that the company is "an independent company separate from your local utility or community" and the offer is an "optional service plan."
But Meehan said consumers often are unaware they are responsible for the pipes in the first place and "don't fully read the information."
HomeServe sells insurance policies of various types under the umbrella company Technology Insurance, which is licensed to do business in Florida, state records show.
And homeowners are indeed responsible, generally, for the water pipes on their own property, local officials say, but to find out whether the homeowner's insurance policy covers those pipes, a call to the insurance agent is necessary.
Water pipes do break. At the city of Fort Lauderdale, spokesman Chaz Adams said the city goes out to investigate when those phone calls come in.
"If the break is located between the meter and the house, it will be the responsibility of the property owner," Adams said. "If the break is not in this area, it will be the responsibility of the city."
But the letter implies that HomeServe looked at the details of each homeowner's case, and Ronald Gilbert found out himself that it's not true.
His elderly mother-in-law in Southwest Ranches got the notice, and she doesn't even have exterior water pipes. Her home is on well water, Gilbert said, and her sewer system is septic.
"It is obviously, to me, a scam, because she's elderly and was worried they were going to sign the authorization and take money from her account," Gilbert said.
Customers are asked to send a check and allow future withdrawals directly from their bank accounts.
John Lucas, press secretary to Attorney General Pam Bondi, said the office received 45 complaints since 2010, most of them from this year. The complaints came in either directly or were forwarded by the Better Business Bureau in Connecticut, where HomeServe is based.
"Our office is currently reviewing those complaints," Lucas said.
One senior citizen in New Port Richey complained that the company was looking for the "gullible" and "has to be stopped" before senior citizens on tight incomes spend $60 a year on a service they don't need.
A Miami woman complained in August, saying she lives in a retirement community where "there are elderly people who might fall for this."
"Where we live," she went on, "we are not responsible for any water lines."
Meehan said HomeServe has done research on whether basic homeowners' insurance covers the repairs, and "not one of the major insurers in the United States do cover it."
At the Florida Department of Insurance Regulation, Amy Bogner, deputy director of communications, said most general policies wouldn't cover "water pipes outside the home ... because it does not cause damage to the home."
The best way to find out? Call your insurance agent.
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