KINGMAN - City officials say a mailing from a Florida-based company has residents concerned that they may need special water line insurance.
The city's public works department has received around half a dozen inquires in recent weeks from residents who have received mailers from HomeServe USA offering insurance for water lines. While the city of Kingman is responsible for the main water lines, homeowners are responsible for their own lines from the point of where they connect with the city's line.
The city contacted the Kingman Police Department after hearing from residents and becoming concerned the mailer was a scam. A check by Lt. Rusty Cooper confirmed that both HomeServe and its insurance underwriters, Wesco and Amtrust Technology Insurance Companies, were properly registered with the Arizona Corporation Commission.
Cooper said the advertisement uses language that might mislead a homeowner into believing that the insurance is required by the city, when it is in fact not.
"In a recent review of our service area, we have noticed that your property does not have
water service line coverage from HomeServe," the ad says. "You are responsible for the maintenance and repair of the exterior water line at the above address. Repairing a broken line could cost you thousands of dollars without coverage."
The company is similar to those offering extended car warranties. The company doesn't actually service the lines themselves, but rather claim to reimburse repairs made by a contractor. Coverage starts at $4.99 a month. They also offer similar warranties for electrical as well as heating and cooling systems.
An Internet search of the company's name yielded news stories from across the country about others being confused by the mailers. The Better Business Bureau has received 84 complaints about HomeServe in the last 3 years, including 21 complaints for deceptive advertising practices and 26 for sales practice issues.
The Kentucky Attorney General last year had the company send out corrected mailers, which clarified that the advertised service was not mandatory. HomeServe also paid a $7,500 fine. Other states have also filed complaints.
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