Reader questions a recent letter received on service line warranties

A reader has questioned the mass mail-out letter that homeowners in Saugeen Shores have received this month.

The reader has been a widow for a number of years now and everything had been changed to her name except the water bill.  The letter recently received from Service Line Warranties Company (SLWC) for the water main at her home was however in her deceased husband’s name. The reader is questioning if the town has apparently given out personal information to this company.

In the mail-out letter however, it states that”

“The Town of Saugeen Shores has not provided SLWC with your contact information.  All contact information is obtained through a third-party mailing list service in accordance with Canadian privacy laws and not through Town records. This program is managed by SLWC and no public funds were used for the mailing of this letter.”

The company apparently uses a third-party service such as Info Canada that provides  mailing lists. A municipality cannot provide addresses due to privacy legislation.

According to the company, “SLWC helps alleviate the stress that comes from dealing with unexpected home repairs” and is insurance against unexpected expenses related to the damage of service lines on your property, such as power lines, phone and cable lines, water and sewer pipes and more. It says that it covers the potentially costly expenses of excavation and repair of underground wiring and piping.
SLWC is a subsidiary of the Pennsylvania-based parent company Homeserve.  In an on-line release, it says that the company’s rates are competitive with insurance providers but added that there are some caveats.  The company for instance will not pay for damages done by negligence or damages from outside sources, such as if a backhoe breaks the line. The company also won’t pay if homeowners are aware of pre-existing damages.

According to the Insurance Bureau of Canada’s director of consumer and industry relations for Ontario, “… it might not be worth it to sign up for a new, optional sewer and water line warranty program.”

In a statement published by Pete Karageorgos with the Insurance Bureau of Canada, “Rather than going out and purchasing another policy, we recommend that consumers and homeowners, contact their own insurance company and see if this coverage is part of their current policy, or can they add it on as an optional coverage.” Most insurance companies in Canada offer some sort of coverage.

“I don’t know why a municipality would want to go down this path,” added Karageorgos.

According to sources however, potential revenue to bolster municipal revenues might be one possible explanation as SLWC allegedly pays a royalty of five per cent of annual sales in exchange for the use of a municipality’s logo, name and property information on letterhead sent to customers.

While SLWC is not doing anything illegal by sending out blanket letters, the company does have to get approval from a municipality to do it. On December 14th, in a Saugeen Shores media release, the town said that “To show the partnership, the mailings will include the Saugeen Shores logo as well as SLWC’s logo”.

In discussion with a local insurance broker, she said that homeowners should definitely sit down with their broker and review their policies.  Most carriers in Canada have a ‘water package’ policy but each is different when it comes to water and sewer line coverage and deductibles. “To determine what coverage you have, you should definitely discuss it with your broker.  Perhaps, the SLWC may be an option but you should make sure.”

The SLWC program is apparently also endorsed however by the Association of Ontario Municipalities (AMO) and has an A+ rating with the Better Business Bureau.