That Xcel Energy/HomeServe mailer offering insurance for exterior water lines or electrical systems? Here’s what it’s about. [Pioneer Press]

Xcel Energy customers taken aback by a mailer marketing insurance coverage for the water line and electrical systems on the exterior of their home can rest assured the offers are legitimate. The utility company previously owned HomeSmart, a monthly subscription service that offers check-ups and in some cases replacement coverage for home appliances.

Xcel, which operates in eight states, has sold its HomeSmart coverage line to HomeServe, a nationwide provider that has been soliciting homeowners with offers to cover exterior water line and electrical system repairs.

“It’s a legitimate mailer,” said Theo Keith, a Twin Cities-based Xcel Energy spokesman. “It’s co-branded between us and HomeServe. It’s approved by us. … This mailer was meant as an introduction to customers that it’s now called HomeServe.”

The two types of coverage are being advertised for about $72 annually, or a combined $130.

“The whole point of it is to minimize unexpected repairs on the customer side, because the customer owns that part of the infrastructure,” Keith said.

Homeowners may not be aware that they own the water line extending from their house, out under the sidewalk and into the public water main in the street. If that should rupture or crumble with age, they could be on the hook for repair and replacement costs, which can stretch into thousands of dollars.

Homeowners also own certain aspects of exterior electrical systems, such as a meter base, service entrance conductor, weatherhead and riser.  The weatherhead is the gooseneck-like rod, or entry point, where overhead power lines enter the home or transition between overhead and underground cables.

In an email, a HomeServe spokesman said the company works with some 5 million customers and 1,250 municipal and utility providers across North America, offering a variety of coverage types for appliances and other home repairs. Residents who may not have received the mailing can visit homesmartplans.com to see all their program offers or call HomeServe at 1-844-245-3657 for more information.

“We sold our HomeSmart service business to HomeServe because they have an excellent track record of customer service and will offer our customers a greater variety of product offerings to fit their needs,” Keith said.

The financial terms of the sale have been kept private.

HomeServe’s U.S. offices are based in Norwalk, Conn., and opened in 2003. The company was founded in Britain in 1993 and has since expanded to France, Belgium, Spain, Italy, Germany, Portugal, Canada and Japan.

Like home warranties, subscription repair services are not without their critics.

“My main concern would be families feeling pressured to enroll in a service that seems to be coming from their utility provider when it’s actually from a random third party with little to no verifiable local presence,” said Matt Privratsky, a St. Paul-based clean energy advocate.

“It can be hard, particularly for new residents, to learn what’s truly needed and necessary to maintain your home and these kinds of services, in particular, feel tailor-made to take advantage of that fear and anxiety,” he said.

Then again, there’s something to be said for sleeping worry-free.

Consumer websites like Marketwatch.com say homeowners would do well to calculate the cost of an unused home warranty or subscription repair service over time — say, multiply the subscription cost by five or six years — and weigh that against the cost of an unexpected appliance repair and the impact on personal savings. Coverage may be less important for new or frequently updated appliances and service systems.

“You may pay a bit more in the long run by purchasing a home warranty than going without one, but millions of homeowners feel that the benefits are well worth the price,” reads Marketwatch.com.

Some potential HomeServe customers have questioned why they would buy coverage for their water line when the city of St. Paul and water utility are currently replacing thousands of lead service lines free of charge for homeowners.

Working alongside the city, St. Paul Regional Water Services has made it a goal over the next decade to replace 26,000 lead lines servicing private homes, most of them in St. Paul.

Using state and federal aid, those replacement costs have been free to date for hundreds of homeowners, though officials have acknowledged that it will be a challenge to find full funding for what could be a $223 million undertaking over the course of a decade.

St. Paul homeowners can determine if they have a lead service line by visiting the interactive map available at StPaul.gov/Water.

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