HomeServe expands offerings through acquisition of ServLine
In the best of times, rural water utilities provide a vital service to their communities. However, the current situation is resulting in unprecedented hardship for many citizens, and water utilities have an opportunity to better serve their customers and enhance security and peace of mind.
The definition of economic shock is an unexpected significant expense or sudden loss of income that causes financial hardship to a household. An economic shock, such as an unanticipated costly home repair, can be devastating to a homeowner’s budget, yet approximately 60 percent of American households endured one in a calendar year, according to the Pew Trust. Among those who did experience such a shock, the most expensive median cost was $2,000 and 55 percent of households struggled to make ends meet afterwards.
With over 23 million Americans unemployed at this time, economic shock is now a reality for an overwhelming number of utility customers. In Utah alone, over 150,000 residents have filed jobless claims since mid-March.
Aging water infrastructure is an ever-increasing source of inconvenience and unanticipated expense for utilities and their customers, as more and more water leaks and service line breaks are occurring each year. As a rural water utility, what can you do to address the financial impact of aging infrastructure? And how do you protect your customers from potentially devastating economic shock? Consider public-private partnerships with solution providers.
HomeServe, for example, is a leading provider of home repair solutions serving more than 4.4 million customers across the US and Canada. The company partners with municipalities and utilities to offer solutions to homeowners.
HomeServe has recently acquired ServLine, a business division of Sunbelt Insurance. Started in 2014, ServLine works with 144 participating rural water utilities in 18 states, through an exclusive affinity partnership with the National Rural Water Association and 28 State Rural Water Associations (SRWAs). The business offers a unique leak adjustment product to participating utilities, which can help cover high water bill costs that result from leaking water pipes on a homeowner’s property. This solution is a win-win for utilities who often have to absorb a portion of the water loss expense and are confronted with dissatisfied customers who are confronted with an unexpectedly high water bill. The program actually lowers utility costs while increasing customer satisfaction. Utilities participating in the ServLine programs currently have 465,000 homeowner connections covered under the leak adjustment program.
“ServLine’s unique business model will enhance what HomeServe can offer to our municipal and water utility partners and their customers,” said John Kitzie, Chief Executive Officer of HomeServe. “By acquiring ServLine and its strong partnership with the National Rural Water Association, HomeServe can provide even more customers a wider variety of solutions for their homes.”
The ServLine Leak Protection program complements another program from HomeServe, the National League of Cities Service Line Warranty Program, which educates homeowners about their responsibility for private-side service lines and offers optional repair service plans for water and sewer lines and interior plumbing. HomeServe and ServLine combined currently have over 900 municipal and utility partnerships.
In Utah, HomeServe has 13 municipal and water utility partnerships. Utah residents have over 56,000 water-related protection plans, and in the last three years, HomeServe plans have saved Utah homeowners over $5.1 million in water-related repair costs.
A recent survey conducted by the Harris Poll in partnership with HomeServe found more than half of Americans had a home repair in the prior 12 months, while one in five has nothing set aside in a “rainy day fund.” That increases to more than 50 percent among those who have a household income of $50,000 or less—in short, a vulnerable population already struggling. Americans with more limited financial means are the most vulnerable to the monetary impact of a home repair or unusually high water bill.
CostOwl estimates the cost of replacing a water service line at between $1,500 and $5,000, depending on the extent of the work, layout of the home and region. Replacing a sewer service line would cost an average of $3,000 to $12,000. Many homeowners don’t know they are responsible for the maintenance of a service line until an issue arises—sometimes literally.
The Prosperity Now Scorecard estimates that 40 percent of American households don’t have the savings to weather an economic shock and 20 percent don’t have access to mainstream credit. This means such a household would be unable to meet that expense, a crippling blow that may force them from their home if they don’t have access to potable water and sanitation.
What residents often don’t know is the water and sewer service lines that connect to their homes aren’t part of the utility’s system. They are not aware that, despite the line extending from the outside of their home to the property line or even past it, the service lines are part of their home plumbing—and their responsibility. When a service line fails, it’s unpleasant for everyone involved, especially when a utility official must inform the resident in crisis that the utility cannot help them with this problem.
A majority of homeowners (69 percent) in the previously mentioned Harris Poll say they would like their local utility provider to offer an optional service repair plan from an outside company for major home systems.
Public entities and private companies have been successfully collaborating for years via advisory boards, stakeholder groups and governance bodies to leverage the collective experience, knowledge and expertise of a broader group. In an environment of increasing pressure to maintain and upgrade aging infrastructure with increasingly smaller budgets, public-private partnerships are an alternative worth pursuing for many rural water utilities.