Water Line Insurance Questioned in Oregon

March 06--A Connecticut company called HomeServe is trying to persuade Eugene homeowners to buy insurance for water lines running from curb to house.

The price is $59.88 a year with automatic renewal, according to a direct mail solicitation from HomeServe that has landed in Eugene mailboxes.

But the Eugene Water & Electric Board is warning homeowners that the company has a poor reputation with the Better Business Bureau and attorneys general in at least three states.

And, up to now, homeowners have gotten by without water line insurance.

"This is one of those classic things where people are offering to sell people something they don't need," said Tony Green, spokesman for the state Department of Justice.

A request for comment from HomeServe's call center in Florida -- one of the company's 29 offices nationally -- got no response Monday.

Since early 2011, the Oregon Attorney General's Office has fielded more than 40 complaints against the company about allegedly false or misleading information: description of services; affiliation with utilities; and company locale.

In the past three years, the Better Business Bureau has received 142 complaints about the firm, concentrated in the areas of advertising, sales, product and service. In the past year, the states of Ohio, Kentucky and Massachusetts have levied fines against the company.

The company's direct mail advertisements are in block type and resemble a government form, with the title: "Important information regarding your water service line."

The form includes a "please respond by" date.

The form promises 24/7 emergency service for enrollees. But it also includes an extensive list of situations that would not be covered, including any "pre-existing conditions" or damage caused by freezing and thawing.

Rick Brand, owner/operator of the Eugene-based Accurate Leak Detection company, said curb-to-house pipe leaks rarely arise as an emergency. Most of the time, they're detected only by a spike in usage on a utility bill.

With 18 years in the business, Brand said he had never heard of a "water service line protection plan" such as that offered by HomeServe. That is until recently, when he got the solicitation in the mail at home.

"They would be paying out a lot in claims," he said, "because I do sometimes two or three of these (leaks) a day."

The cost of repairs can vary based on the hardness of the surface over the line and the depth it's buried, he said, but is usually about $500.

EWEB spokesman Joe Harwood said a dozen utility customers called to alert the utility when they received the letters.

"People could smell something rotten," he said. "Something didn't feel right."

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