MEMPHIS, TN (WMC) - The warranty offer is legitimate. But so are our questions about American Water Resources.
The New Jersey-based company continues to mail an untold number of marketing brochures to Mid-South homes. It has for years. The brochures tout a 12-year-old water and sewer line warranty program. For $5 a month, customers are guaranteed up to $5,000 in repairs of water or sewer line damage that is determined to be the responsibility of the homeowner. The warranty provides an additional $5,000 in protection if roadway repairs are necessary.
Customers make one call and file a claim. Then American Water Resources dispatches a local "certified" contractor to do the job.
"And then that's it," Barbara Boyarsky, the company's former vice president and general manager told us three years ago. "The customer doesn't really have to do anything else. We get the permits. We do the job. We get it done."
She said the company designed the warranty program to take care of water line damage that neither a local utility nor a homeowner's insurance policy will cover -- specifically, water lines running from the home to the water meter. MLGW's communications team confirmed the water lines between the meter and the customer's home are considered the private property of the homeowner.
An insurance source who spoke on condition of anonymity also confirmed most homeowners' insurance policies do not cover damage to water lines running from the meter to the home.
The Better Business Bureau gave American Water Resources its highest customer service rating: an A+. However, the BBB has recorded 308 complaints about the company in three years, 186 of which were closed in the last 12 months. The complaints include "problems with product/service," "guarantee/warranty issues" and "billing/collection issues." The BBB confirmed American Water Resources resolved each complaint with the bureau's assistance.
Before you consider the water line warranty, be aware of these:
* IT LIMITS YOUR CHOICE OF CONTRACTORS. Under the American Water Resources warranty, you must have repairs performed by local contractors who are under contract with the company. You cannot hire your own contractors or shop for estimates.
* IT'S VOIDED IN FLOOD ZONES. Make sure your home is not within a flood zone before you commit to the warranty's 1-year customer contract.
* IT'S VOIDED BY PRE-EXISTING CONDITIONS AND 'ACTS OF NATURE.' That allows a lot of wiggle room for the company to deny claims.
The warranty includes a 30-day money-back guarantee after signing the contract. After 30 days, you can still cancel, but any refund is prorated.
Consumers considering this should also consider this alternative: set aside a budgeted amount of money each month as a home repair emergency fund. That would give consumers the flexibility of vetting their own contractors with the Better Business Bureau and with state contractors boards.