This is guest post by Bill Eller, vice president, business development at HomeServe.
Ever the trailblazer, California’s first city, San Diego, also was the first city in California to embrace the NLC Service Line Warranty Program, entering into a partnership in June 2012. As the Preferred Service Line Warranty Partner of the City of San Diego, the warranty program works with the city to raise awareness among the city’s 250,000 residential water customers of homeowners’ service line responsibilities without cost to the city.
The warranty program, administered by Utility Service Partners, a HomeServe company, offers water and sewer service line warranties to homeowners. In San Diego, more than 8,500 homeowners are enrolled in nearly 11,000 repair service plans. Policyholders have saved more than $1.2 million in home repair costs. The program maintains a network of contractors who are fully vetted, licensed and insured in the communities where they work and live – a benefit, because local contractors know local code and permit requirements.
In the HomeServe Biannual State of the Home Winter 2018 survey, 88 percent of respondents said municipalities should educate homeowners about their water and sewer service line responsibilities. In addition, 13 percent of respondents erroneously thought service lines were the responsibility of their municipality, 11 percent believed their homeowners insurance would cover the repair, and 18 percent didn’t know who was responsible for maintaining service lines.
Natasha Collura, San Diego Corporate Partnerships and Development, noted that the city did due diligence in investigating the program, reaching out to other cities who have partnered with the program – and city officials liked what they heard. Because the program has been vetted by the NLC, it gave city officials confidence that the program would deliver on its promises. Collura added that having a partnership with the program was beneficial, because it made the program accountable to the city in the case that there was an unhappy resident, allowing the city to maintain a measure of control.
“That’s something we just can’t do with other [warranty] companies,” she said. “We feel confident that if something goes wrong – which happens rarely – we can come in to help.”
Just as some residents are unaware of their service line responsibilities, many don’t realize what poor shape our national water infrastructure is in, with more than 40 percent of that infrastructure considered poor, very poor or elapsed. An estimated 2.1 trillion gallons of water – or 6 billion gallons a day – are lost each year, much of it during the 240,000 water main breaks that occur annually.
San Diego officials understand the importance of renovating their water systems, investing $1.1 billion in water and sewer improvement for their residents. Even as they work to ensure their water and sewer infrastructure will be in good repair for years to come, they are unable to improve “private side” service lines. Neither are many homeowners – 57 percent have $500 or less saved for emergency home repairs, with almost 20 percent having nothing saved. Households with incomes of $50,000 or less are particularly vulnerable, and more than half of homeowners had a repair emergency within the past year.
“We’ve known that [service lines] are an issue for several years, and we have an aging population,” Collura said, noting that, while the city hadn’t compiled hard data on resident awareness, anecdotal evidence indicated the educational program has made an impact. “It’s great education for the public at no cost to the government.”
Program partners may qualify to receive royalty payments that can be applied to anything from general funds and infrastructure improvements to charitable programs and low-income billing relief. The warranty program also made a $150,000 donation toward the launch of the city’s Help Two Others San Diego (H2O SD) program to celebrate the renewal of the partnership. H2O SD helps low-income residents with water bills – because of California regulations, such programs must be funded by donation.
“This program helps offset the water bills of low income and struggling residents,” Collura said, noting that the royalties the city receives for its general fund also are put to good use. “[H2O SD] is a great program.”
As part of the partnership with San Diego, the warranty program obtained approval from the California Department of Insurance to do business as a home protection company. In California, the warranty program boasts 24 partners with more than 190,000 customers. In the last three years, the warranty program has successfully completed 54,000 jobs, saving customers $28 million. Nationally, the warranty program has performed 1.2 million repairs, saving policy holders more than $394 million, over the past three years.
About the author: Bill Eller currently serves as Vice President, Business Development at HomeServe. He is responsible for working with municipalities to educate and develop the best program options for their residents.