Commentary – Insurance Fliers Confuse Consumers

All of us get them, the mail envelope that looks so official! At first glance they appear to be something we need to deal with right away. In most cases however it is a ploy by companies to get your attention. While this article deals with a specific company, I can tell you that I receive dozens of pieces of this kind of junk mail a month and it does get tiring. Have an opinion? Leave us a comment at the end of the article below!

The article below by Brittany Wallman of the Sun Sentinel and published recently in Houselogic talks very effectively about this issue.

Insurance sales offer that looks like a bill from the government confuses home owners.

By Brittany Wallman, Sun Sentinel

Nov. 27 — An insurance company with a record of consumer confusion and accusations of deceptive advertising is papering Florida with direct-mail advertisements that look more like bills from the government.

The mailings warn that the recipient’s home address “has appeared in our review” as being without insurance for the water line leading from the home to its connection with the water system. A repair or replacement, the letter goes on, could cost “thousands of dollars” and “burden finances in these difficult economic times.”

Some have been confused, frightened, and unsure what to do with the official-looking notice from HomeServe USA, whose mailing carries a response deadline of 30 days and shows a “status” of “pending.” Should they pay the modest $4.99 a month and send the check to the “plan administrator” on the return envelope? And what if they don’t?

HomeServe USA Senior Vice President Myles Meehan said the company is legitimate, serving 1.1 million customers in America and Canada, about 87,000 in Florida.

The company ran into trouble in other states where customers complained about the mailings, most recently in Iowa, where the attorney general’s office formally warned against what it considered deceptive business practices.

Attorneys general in Ohio, Kentucky, and Massachusetts have also gotten involved, acting on complaints of misleading solicitations.

In Florida, the attorney general’s office said Monday that it is looking into complaints about HomeServe USA.

The company sent mail to 600,000 customers in Florida in November, Meehan said.

“There were some complaints in just a handful of states,” Meehan said. “We worked with state agencies to improve our materials to make it more clear.”

The mailing does advise customers that the company is “an independent company separate from your local utility or community” and the offer is an “optional service plan.”

But Meehan said consumers often are unaware they are responsible for the pipes in the first place and “don’t fully read the information.”

HomeServe sells insurance policies of various types under the umbrella company Technology Insurance, which is licensed to do business in Florida, state records show.

And home owners are indeed responsible, generally, for the water pipes on their own property, local officials say, but to find out whether the home owner’s insurance policy covers those pipes, a call to the insurance agent is necessary.

Water pipes do break. At the city of Fort Lauderdale, spokesman Chaz Adams said the city goes out to investigate when those phone calls come in.

“If the break is located between the meter and the house, it will be the responsibility of the property owner,” Adams said. “If the break is not in this area, it will be the responsibility of the city.”

But the letter implies that HomeServe looked at the details of each home owner’s case, and Ronald Gilbert found out himself that it’s not true.

His elderly mother-in-law in Southwest Ranches got the notice, and she doesn’t even have exterior water pipes. Her home is on well water, Gilbert said, and her sewer system is septic.

“It is obviously, to me, a scam, because she’s elderly and was worried they were going to sign the authorization and take money from her account,” Gilbert said.

Customers are asked to send a check and allow future withdrawals directly from their bank accounts.

John Lucas, press secretary to Attorney General Pam Bondi, said the office received 45 complaints since 2010, most of them from this year. The complaints came in either directly or were forwarded by the Better Business Bureau in Connecticut, where HomeServe is based.

“Our office is currently reviewing those complaints,” Lucas said.

One senior citizen in New Port Richey complained that the company was looking for the “gullible” and “has to be stopped” before senior citizens on tight incomes spend $60 a year on a service they don’t need.

A Miami woman complained in August, saying she lives in a retirement community where “there are elderly people who might fall for this.”

“Where we live,” she went on, “we are not responsible for any water lines.”

Meehan said HomeServe has done research on whether basic home owners’ insurance covers the repairs, and “not one of the major insurers in the United States do cover it.”

At the Florida Department of Insurance Regulation, Amy Bogner, deputy director of communications, said most general policies wouldn’t cover “water pipes outside the home … because it does not cause damage to the home.”

The best way to find out? Call your insurance agent. or 954-356-4541.

(c)2012 the Sun Sentinel (Fort Lauderdale, Fla.)

Visit the Sun Sentinel (Fort Lauderdale, Fla.) at

Distributed by MCT Information Services


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About gvenice

I have over 25 years of electrical engineering and business management experience. I previously owned and managed a multi million dollar engineering firm. My work took me all over the globe, managing the construction of manufacturing plants where I built a reputation of providing superior service, getting projects done on time and within or under budget. My dedication to the fine details and logical approach to accomplishing tasks provide a huge benefit to my Real Estate clients. After selling my business and retiring to this area, I found a new passion in the Real Estate business and I bring to this business the same level of professional skill and conduct that has made mr successful in the past. My global exposure and extensive travel are also an asset when dealing with a customer base that is located worldwide. An avid boater, I have a thourough understanding of the waterways of East Tennessee and the intricacies involved in dealing with the TVA and the Army Corps of Engineers.
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