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Residential service line insurance

Status: Closed
Assigned To: kartis (City Manager)
Ticket ID: 17391264c

Over this past year I have received several letters from a company called “Service Line Warranties of America” offering insurance to cover repairs of water and sewer lines leading to the residence. As of today (Saturday, January 11) I received another letter from this organization stating the same offers for coverage but this time under the name “Service Lines Montana.”. I am aware that my current homeowners insurance already covers such events and do not require additional coverage. But this is not the purpose of this writing.

My concern is the method by which this organization sells its services to the homeowner, specifically in the area of Great Falls and most likely in other cities as well. The company is using the official seal of the City of Great Falls in its advertising literature which leads the recipient to possibly falsely believe that this company’s services are sanctioned by this city. Or am I wrong and this city does sanction this organization??

In addition to the above concern is if city government administration is aware of the reviews that this company is receiving from those across the United states who have taken out coverage from this company and have received substandard repairs to their utility lines by the contractors subcontracted by Service Line Warranties of America.

Talking with those locally who have received mailings from this company I am aware that it is generally known by many residents of Great Falls that this company is not to be trusted. From this it seems that the City of Great Falls may be putting itself in a less reputable position allowing Service Line Warranties of America to incorporate the city seal in their correspondence.

Ticket History

Closed
Updated By: kartis
Assigned To: kartis (City Manager)
01/23/2020 - 8:46am
Public
Open
Updated By: kartis
Assigned To: kartis (City Manager)

Thank you for the follow up response.  I would like to offer the email address for our representative with SLW.  His name is Justin and he can be emailed at: Justin.Steinbugl@homeserveusa.com.  The City is not able to answer the specifics to their programs so I would recommend you send him an email of your questions and concerns.  After talking to Justin if you still feel that this should be considered when we possibly renew the agreement with the company please let me know and I will file for consideration at that time.  Thanks and have a good day.  Krista 

01/15/2020 - 12:11pm
Open
Updated By: Visitor
Assigned To: kartis (City Manager)

Krista,

Thank you for your reply. I must admit that I may have been a little hasty in my initial writing regarding use of the city official seal in the mail advertisements sent out by Service Line Warranties of America (SLWA). Taking a little more time after writing I did a little more searching and found an answer to my question.

It appears that SLWA offers, at its option, remuneration to municipalities and local governments in return for use of their official identification on SLWA documents. This more-or-less brings about a better understanding as to why the seal appears.

Additionally while I was searching I came up with a few other facts of interest regarding SLWA. Looking at a few warranties offered by them in various areas of the United States it appears that coverage of utility repairs may not be as comprehensive as expected. Based upon a typical line repairs/replacement SLWA offers coverage somewhere between 30 and 60% of the overall cost leaving the homeowner with a significant remaining cost to bear. Inquiries with the few contractors who do trenchless sewer line repairs in this area about cost to do so resulted in figures ranging between $10 and $15 thousand dollars. I suspect that the coverage amount is probably based upon the repair/service metrics for each area that SLWA insures.

I did come across an analysis regarding the low annual cost of a SLWA warranty versus their disbursement of funds to pay for the repairs, the analysis showed that it would take SLWA anywhere from 30 to 50 years to recover their costs. Obviously this would not be acceptable for any company attempting to make a profit so I am sure that SLWA has implemented creative means so as to not be impacted by such a situation.

In reference to the page found on the City of Great Falls website regarding SLWA I clicked on the “Frequently Asked Questions” link at the bottom of the page. Reading through the answers I noted the last item, “Who are the local contractors who participate in this program?” so called SLWA to inquire. My call was answered by several people who could not provide any answers as to who did provide service. In addition I was placed on hold, dumped back into the automated VRU system only to answer the same menu questions over and over but finally found an agent who directed me to another person. I then queried this person as to who the contractors may be, was placed on hold several times again and finally received the answer “…that is proprietary information.” So this item on the FAQ page is sort of misleading.

So, it is believed that the homeowner who chooses SLWA services is at the whim of SLWA when it comes to whomever responds to provide maintenance or repairs. Calls to a few major local contractors indicates that it appears SLWA randomly contacts agencies to find one who will provide the service at the time of the call and will not necessarily honor a request from the customer should they already have an established relationship with a given contractor.

Regards,

Greg Muir

01/15/2020 - 11:53am
Public
Open
Updated By: kartis
Assigned To: kartis (City Manager)

Mr. Muir, 

Thank you for your comments and concerns.  The City Commission approved the agreement with Service Line Warranties of America on November 20, 2018 and an Amendment to the Agreement on May 7, 2019 to offer this product to residents within Great Falls.  With this agreement, the Company is authorized to use the City's Logo for their mailing campaign.  The City does not provide customer information to the company and does not pay for any of the mailings.  This is not an exclusive agreement and citizens would need to decide if the product from SLW would work for them.  They can certainly research other companies.  What we have found is that not all homeowners insurance covers this type of claim. Here is a link to a press release issued by the City with some additional information:   https://greatfallsmt.net/finance/service-line-warranties-america . Any complaints that we have received from our citizens have been forwarded to the account representative and have been remedied.   We have also received positive feedback for citizen's utilizing the program.  We will continue to monitor as this is a three year agreement.  Thanks, Krista, City Manager's Office 

01/14/2020 - 3:47pm
New
Assigned To:

Citizen request/question created.

01/11/2020 - 4:41pm

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