KNOXVILLE (WATE) - Many Americans purchase insurance whether it's for vehicles, health, home or life insurance. But have you ever heard about a policy to protect the water lines at your home?
Nelia Yarnell, of Knoxville, called 6 On Your Side about a letter she received in the mail. Many Knoxville residents recently received a notification from an emergency repair company called HomeServe USA.
The company tells 6 On Your Side it protects over 1 million homeowners across the country from unexpected repairs not covered by typical home insurance plans.
However, some people who received the letters are calling their utility company to find out what's going on.
Nelia recently had a new deck built a new roof put on her 34-year-old house, and she's getting ready to add new windows.
Her notification came from HomeServe out of Memphis. The offer says it "contains important information regarding her water service line." On the reverse side are illustrations showing where things can go wrong with a homeowner's water line. It explains that line repairs could cost thousands of dollars.
"They're saying up to $6,000 in annual coverage," Nelia said, according to the letter.
It also included a section where she could pay by credit card, ranging from $4.99 a month to nearly $60 for a year's worth of insurance.
"I'm very skeptical about things like this. I called the water company and inquired about it," Nelia said.
She gets her water from First Utility. A customer service representative spoke with her. "She didn't recommend that I apply for it, but to tear it up and throw it away," Nelia said.
She also says that at first, she believed First Utility endorsed the company that sent the letter.
6 On Your Side spoke with First Utility General Manger Bruce Giles, who said, "We are not affiliated with this company. We highly recommend that they investigate before they sign a private contract with a firm like this."
Utility companies bring water to your home, but from the street to your house as a homeowner you're typically responsible for repairing any leaks or ruptures on the line.
"How frequently do you get a leak from the meter to your house in the first place?" Nelia said. "And if I did, I would inquire about who to call in order to take care of it."
HomeServe is a legitimate company. If you were to buy its water line service, HomeServe says it would hire local plumbers to make repairs.
But we discovered court action has been filed against the company. Without any admission of guilt or violation of law, HomeServe was required by Kentucky and Massachusetts to conspicuously disclose that its coverage is an optional service and that it not affiliated with any water utility company.
Several First Utility customers have received letters from HomeServe. "Our customer service staff has been explaining to folks that they need to do further investigation," Giles said.
Nelia is convinced she doesn't need insurance to protect her water line. "It's my concern that elderly people will be taken in by this," she said. "They won't take the time to read it thoroughly."
HomeServe tells 6 On Your Side it believes the disclaimers on the notification letter about water lines are clearly stated and not misleading.
We found that HomeServe USA has a "D" rating from the Better Business Bureau. The complaints range from advertising and sales issues to problems with the products and service.
If you have a consumer issue, call the 6 On Your Side Hotline at 865-633-5974 or email email@example.com.