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Serving the communities of Massena and Potsdam, New York
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HomeServe letter puzzles residents, officials

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MASSENA - David F. Bence has lived in his Massena home for nearly 50 years and never encountered problems with his hookup to the village water line.

So he was puzzled Tuesday when a piece of mail arrived offering him insurance coverage in case the line stretching from his house to the village main ever broke.

A logo of the state of New York, along with an Albany return address, was in the upper left hand corner of the letter. Mr. Bence said the letter from HomeServe USA Repair Management Corp. resembled a state tax bill.

“It looked so official,” he said. “I’m confident it was a scam.”

Stamford, Conn. based HomeServe recently mailed coverage solicitations to homeowners in area communities, including Massena, Potsdam, Canton and Ogdensburg. The company notified the governments in each community last week of the upcoming solicitation.

The letter begins, “A recent review of our service area indicates that your home at (address) is not covered by water service line coverage from HomeServe.”

HomeServe provides coverage for up to $6,000 annually in lateral water line repairs, according to the letter.

HomeServe then urges homeowners to sign up for the service by Aug. 29 and attaches a bill giving residents the option of paying by credit or debit card, E-Z pay, and check or money order. The coverage costs $5.34 monthly, $16.02 quarterly or $64.08 annually.

Officials are reminding residents to exercise caution before signing up for any such service.

“It would be very wise for people to do some research and draw their own conclusion about this solicitation, and for me personally, with what I have seen so far, I am not satisfied and won’t be signing up,” Massena Police Chief Timmy J. Currier said in an email.

HomeServe began in 2003, according to spokesman Myles Meehan. It has customers across the country, has served downstate New York for several years and is expanding upstate.

“What really surprises me is that communities very often rush to warn their residents about the legitimacy or value of our offer, yet very few, if any, take proactive steps to tell their residents that they are in fact responsible for their water and sewer lines,” Mr. Meehan said in an email. “The time most people in these communities find out that they are responsible is after the line has broken, when they are faced with finding a contractor and left with a great expense.”

The top 14 U.S. homeowners’ insurance companies do not offer protection for lateral water lines, and the country’s aging infrastructure is cause for concern about their potential rupture, Mr. Meehan said.

“HomeServe USA is offering these protection plans to homeowners in your area to provide peace of mind and protect against costly repairs,” he said.

“Unfamiliarity with our brand may be the reason why many ... are unsure about us or feel that our offer is not legitimate. Clearly, this is not the case.”

HomeServe has operations centers in Chattanooga, Tenn. and Miami, Fla. The Albany address listed on the solicitation is a P.O. box; the United States Postal Service forwards all mail sent there to the company’s operations centers.

“HomeServe uses local P.O. boxes as an important tool to reinforce to consumers that HomeServe’s services are available through a local presence,” Mr. Meehan said in an email. “Expressing this message offers comfort to consumers that local service will be provided to the consumer to fulfill the requirements of the service contract.”

The Aug. 29 deadline is not a final date to pay HomeServe for the service, but rather a “call to action,” Mr. Meehan said.

“They don’t need to buy it by that date,” he said.

HomeServe contracts with local companies to complete lateral line repairs, Mr. Meehan said. In the letter to area officials, HomeServe states it has delivered over $75 million in emergency repair services in the last three years and provides coverage to over 1,000,000 homeowners nationwide.

HomeServe is not accredited by the Better Business Bureau but receives an “A” grade on the Connecticut BBB’s web site. Still, the BBB received “numerous complaints nationwide” that the company’s solicitations “may cause consumers to perceive the letters as coming from the consumers’ utility companies and not an independent business selling home warranty or insurance coverage.”

In 2010, HomeServe reached settlements with the state attorney generals in Ohio, Georgia and Kentucky after the company allegedly mailed misleading solicitations to residents in those states, according to the BBB web site. Each settlement required HomeServe to more clearly clarify its services in solicitations to prospective customers.

At the bottom of the letter, HomeServe states it is an “independent company separate from your local utility or community.”

But several residents have still called the village offices confused, according to Lisa Tyo of the village of Massena’s water billing department.

“(Homeowners) think that since they have municipal water that this is coming from us,” Ms. Tyo said. “This is not being sent out from the village.”

Mr. Currier said he wanted to find out more about the local companies HomeServe plans to contract with.

“We are trying to get more information on this company, and specifically, I’d like to know what local contractors and companies they contract with, so references can be checked,” Mr. Currier said.

Mr. Meehan said HomeServe was still in the process of recruiting qualified area contractors.

Department of Public Works Superintendent Hassan A Fayad also cautioned residents to do their homework before signing up.

“I’ve never heard of this concept before,” Mr. Fayad said of the insurance coverage.

If a lateral water line does break, it costs the homeowner between $1,700 and $2,000, he said.

Customers have the option of retaining the DPW for the repairs or can contact with a private firm.

“It doesn’t happen an awful lot but it does happen from time to time,” he said.

Canton Police Chief Victor N. Rycroft said HomeServe may very well be legitimate, but urged residents in his village to research the company before paying any money. Potsdam Administrator David Fenton said most lateral water lines in that village are 15 to 20 feet long, nearly six feet underneath the ground and rarely break.

Mr. Fenton said he would not be signing up for the service.

“I very seldom see residents have problems with the water line between the curb and the house,” Mr. Fenton said. “It’s pretty much a waste of money for most people.”

But HomeServe can be helpful in the event that a lateral line does rupture, Mr. Meehan said.

“That’s not something a homeowner has sitting around from a cash perspective,” he said. “It takes the whole effort and expense from the homeowner and puts it on us.”

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