Letters regarding insurance for lines not from Vermilion Water Districts

Some residents in rural portions of Vermilion Parish have received letters offering optional insurance plans for water lines.
Those letters are not originating from any of the four water districts in the parish. Dale Stelly, system manager with Water District No. 1, said Tuesday morning that he is familiar with the letters.
“They have circulated every once in a while during the past two or three years,” Stelly said. “They are sending them out to rural areas.
“I actually received one and gave them a call. I told them who I was and they hung up on me.”
A customer with Southeast Water District No. 2 in Vermilion received a letter recently from HomeServe USA Repair Management Corp., based in Norwalk, Conn. The letter, obtained by the Abbeville Meridional, offers the customer the option of purchasing a monthly insurance policy for $4.99 that offers a $6,000 annual benefit or $3,000 per call for two calls a year. The letter comes with an acceptance form and payment options. The letter also offers more information at www.LAwaterservice.com, which brings the customer to a HomeServe USA website.
A portion of the letter reads: “Your property (located on La. Highway 335) has appeared in a review of our records for Abbeville and we have found that your exterior water line is not covered with Water Service Line Coverage from us.
The water service line buried underground on your property could fail without warning, leaving you responsible for the cost of repair. Repair or replacement of this line can be expensive — costing you thousands of dollars in unforeseen expenses — which could burden finances in these difficult economic times.”
Stelly said he has contacted some in the industry to better gauge the situation.
“I talked to our risk management agent,” Stelly explained. “That is Ed Villien, who is actually from Abbeville and works out of Lafayette. He insures the Vermilion Parish School Board and Police Jury, as well as the water districts. He has been in the insurance business for a long time.
“I faxed him a copy of one of the letters recently.”
Stelly said Villien’s response is the letters are nothing illegal.
“He (Villien) said we live in a free enterprise and those insurances are available out there,” Stelly explained. “They will cover if someone has the misfortune of having a busted pipe that runs a water bill into the thousands.
“It’s up to the individual customer if they want to purchase the plan.”
Stelly said that is his personal assessment of the situation.
“I can’t say that it’s a scam,” Stelly said. “It’s legal. All I can say is that the letters are not affiliated with any water district in Vermilion Parish. They try to make them seem like they are. I have had people call me and ask why we are sending out these letters. The water districts have nothing to do with the letters.
“I can’t tell someone as a customer not to buy it. I wouldn’t encourage it, but that is left up to the costumer if they want to insure their water line.”
Myles Meehan, senior vice president of public relations with HomeServe, said Tuesday afternoon that the company is in no way a scam and is simply offering an optional service.
“Many homeowners get one of our mailings and they have never heard of us or the service offering that we have,” Meehan said of why some may think it is a scam. “The plans are fully underwritten by Wesco and Technology Insurance Companies, AmTrust Group Insurance Companies rated A (Excellent) by A.M. Best. HomeServe is the administrator of the service plans or in select states, insurance policies. HomeServe plans not only provide financial protection, but also facilitate the repair itself using local licensed and qualified contractors.”
Meehan said HomeServe, which has an A-minus rating and is accredited with the Better Business Bureau, does have presence in Louisiana.
“HomeServe is relatively new in Louisiana,” Meehan said. “Today we serve roughly 4,000 homeowners around the state that have about 7,500 service plans.”
That is part of more than one million customers in North America.
“HomeServe currently services over 1.5 million customers holding more than 2.3 million service plans across the continental United States, and Alberta, Canada,” Meehan said. “The company is authorized to do business in all 50 states.”