Water line insurance coverage might be a scam

Published 7:00 am Friday, March 6, 2015

Recently, the Pearl River County Utility Authority received notice from a local homeowner regarding a letter received in the mail from an out-of-state insurance company, which is offering insurance coverage for homeowners’ external water lines.

Utility Authority Assistant Executive Director Debbie Bounds said this isn’t the first time they’ve received inquiries from residents concerning letters like these.

“We’ve had several customers in the past inquire about this, and periodically these letters circulate, but we’d like to let our residents know that they should disregard the letter,” Bounds said.

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The letter, sent out by the HomeServe USA Repair Management Corp., states, “We have found that your property is not covered with exterior water service line coverage from us…the water service line buried underneath your property could fail without warning, leaving you responsible for the cost of the repair.”

The letter also said the monthly rate for the insurance coverage, which offers water pipe repair or replacement, is $5.49.

Local Allstate Agent John Pigott said homeowner insurance companies don’t offer insurance coverage for water pipe damage unless an external force is responsible.

“I think it’s an unnecessary coverage,” Pigott said. “I can’t say whether it’s a scam or not, but very few people have issues with the pipes underneath their homes, so to pay a certain amount a month for the coverage doesn’t make sense.”

Roszell Gadson, who deals with media relations for State Farm, said the company doesn’t offer insurance coverage for pipe damage either.

A representative from HomeServe who declined to be identified by name said the company offers the coverage as a way to provide homeowners with another option.

“We fill the void between what homeowners insurance covers and what the city covers. If the pipe leaks or there’s any damage, we will come out and fix it for those under the coverage,” he said.