Waterline repair insurance is legitimate, but DFW cities may have better deal

By Dave Lieber

watchdog@star-telegram.com

Homeowners in Tarrant County's biggest cities -- Fort
Worth, Arlington and North Richland Hills -- contacted The
Watchdog last week to ask about a mailing they received
advertising a new company selling repair protection for water
and sewer lines. They wonder whether it's legitimate.

American Water Resources of Texas, which bought its state
license in November, is a residential service company that
promises to cover some repairs to water and sewer lines outside a
home.Generally, water and sewer lines would be covered to the
point where the cities take over the lines -- at the water meter
and where the sewer line hits the main drain.Enough homeowners
peppered their water and sewer departments with questions about
the mailing that all three cities felt compelled to take
stronger-than-usual action to address concerns.Fort Worth posted
a notice on its website with the headline "Water Department does
not endorse service line warranty programs."North Richland Hills
spokeswoman Mary Peters told me, "I'm glad you are writing about
this" because the city received questions. She wanted to counter
what she considered an exaggeration in the mailing.Arlington
officials went as far as contacting the company and asking for
changes on the website. Arlington wants residents to know that it
offers a repair program that goes beyond what many other cities
offer.Water Resources' plan works much like an extended warranty
for an appliance. Buyers gamble that they will need it someday.
The key word is gamble.First, as
Water Resources says in its mailing, cities generally do not pay
for repairs to water and sewer lines from the house to the city's
portion of the lines. That's the homeowner's responsibility.
Repairs can cost thousands of dollars but sometimes cost far
less.Many insurance companies cover little of the repair cost
from leaks. Water Resources does somewhat, but it doesn't pay to
repair any waterline clogs or blockages. The company also says it
pays for leaks or breaks in sewer lines only if they're caused by
a blockage or a clog.Water Resources charges $5 a month for up to
$5,000 in waterline repairs and $9 a month for up to $4,000 in
sewer-line repairs, with $4,000 more covered if a roadway has to
be dug up. There's also a $50 service fee per sewer line problem
but no charge for a waterline problem.Company officials told me
that those are the only out-of-pocket costs for customers. After
a problem is found -- if it is covered -- the company hires a
contractor, gets required permits and completes the covered
repairs.The company has a perfect rating from the Better Business
Bureau. The Texas Real Estate Commission, which regulates home
warranty companies, says the company is too new to have any
complaints on file.The company is a subsidiary of the
126-year-old American Water Co., a publicly traded water- and
wastewater-utility company based in New Jersey. Cities that
outsource their water and sewer services use such
companies.American Water Resources of Texas was formed as part of
the company's expansion into other states.As with any service
warranty company, it's important to look at what isn't covered.
Anything not resulting from normal wear and tear on water and
sewer lines, such as problems caused by a homeowner or other
third party, problems caused by natural disasters or anything
caused by poor construction or defective materials, isn't
covered.Arlington officials wanted the company to make sure that
the public knows that Arlington offers a repair program for the
portion of a sewer line in the public right of way or in a
utility easement, even if it's on a homeowner's property, but
only in cases of structural failure of the sewer line in that
area.North Richland Hills officials want residents to know that a
photograph on the company's brochure showing a bulldozer digging
up a front yard is a bit overdone."Most service line problems we
hear about from homeowners are minor issues such as roots getting
in the line," Peters said. "In that situation, all a homeowner
needs to do is call a plumber to clear the line."Fort Worth
offers a program for water customers who have a leak. They can
send receipts for plumbing repairs and parts to the Water
Department and request a 50 percent cut in their water bill for a
leak adjustment.Fort Worth gives sound advice on its website:
"Like with any insurance or warranty program, individuals should
do their own due diligence to learn what is and is not covered
and what exceptions apply."The Watchdog
column appears Fridays and Sundays.Dave Lieber, 817-390-7043Twitter: @davelieber

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Waterline repair insurance is legitimate, but DFW cities may have better deal