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Water firm invites customers to buy coverage on e-devices

Ken MammarellaBusiness, Headlines

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The company that provides water to about 100,000 people in New Castle County is known for regularly sending out snail-mail letters advocating that customers buy some financial coverage for their sewer lines in case they break.

It now is suggesting something similar for electronic devices.

Veolia believes in bringing our customers the best in service and value,” it explains in a recent letter mailed to customers. “That’s why we’ve partnered with HomeServe” for repair or replacement for personal computers, tablets and flat-screen TVs. An upgraded plan covers cellphones.

The basic plan is $12.99 a month; the upgrade is $19.99.

So is it worth it?

The company that offers the plans says it is.

“Approximately two-thirds of consumers say they would prefer to have one plan that protects their mobile phones with other devices, yet manufacturers, wireless carriers and retailer plans haven’t fully addressed this customer need,” said Myles Meehan, senior vice president of HomeServe.

Consumer advocates and various media posts disagree. Sometimes stridently.

“You should never insure something that is a consumer item,” Clark Howard, a consumer advocate for almost 30 years, says on . “The best insurance you can have for a cellphone is to put a protective case on it and a screen protector and not buy any insurance,” he continues.

And the new gadget coverage isn’t really insurance, even though casual readers might leap to that conclusion by the legalese. A review of three documents in the new mailing found the word “insurance” only once, when referring to “homeowners insurances.” The favored term for what’s being sold is “tech protection plan.”

The situation with coverage for water mains and sewer lines appears to be similar. “Your utility company probably offers ‘insurance, against water main breaks,’ ” AARP wrote in 2021.

“Typically, these are home warranty contracts, not insurance, and they are usually offered by a third party, not the utility itself. This is a common arrangement: Most utility companies don’t want to repair water lines, and they get a cut of the contract cost from the home warranty company.”

More than 7 million U.S. homeowners have purchased these plans, pulling in $900 million a year, according to information disclosed in annual reports from the largest warranty companies,” The Washington Post reported in 2021.

“Marketing materials received by homeowners often warn of dramatic potential costs if they don’t protect themselves with offered coverage. … But Checkbook’s research finds that few homeowners ever have to deal with expensive water or sewer line repairs or replacements.

“In exchange for lending their names and logos, the utilities that sign on to help sell these warranties get a share of the premiums,” the Post continued. “Many utilities that partner with warranty companies say they direct their shares of sales to a good cause,” including recycling “the warranty fees it gets back to its customers.”

“Under the HomeServe and Service Line Warranties of America brands, we serve 4.8 million customers through over 1,100 municipal and utility partners across the country,” Meehan said. “This includes Veolia, where we have served their customers in Delaware since 2005. And we are proud to have an A+ rating with the Better Business Bureau and to be endorsed by the National League of Cities.

Nearly 10,000 Veolia customers in Delaware hold plumbing-related service plans, and 2,200 have used the service over the last two years, saving $1.5 million in repair expenses, he said. These customers given HomeServe 4.7 out of 5 stars.

HomeServe Tech Protection, just launched with five utilities, provides “unlimited claims up $3,000 per year on any three covered devices, new or used, and includes a 90-day guarantee on covered repairs,” Meehan said. The protection covers “the most common types of damage, including drops, cracks and spills. Also covered are normal wear and tear, electrical surge damage, and malfunctions due to defects.”

HomeServe was founded in the United Kingdom in 1993 and has served the US since 2003. It has more than 600 municipal, utility and association partners in North America, with more than 5.6 million contracts in the US, it says.

It has been an accredited BBB member since 2014, the BBB says. Consumers give it 3.75 stars. The BBB also lists 615 complaints in the last three years.

HomeServe gets 2 stars on Yelp, 2.8 stars on Facebook and 4.3 stars on Google.

Veolia may not be that familiar of a name yet. This spring, Veolia acquired Suez, its French rival. Suez had been serving New Castle County since 1999, when it purchased United Water.

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