Thursday, December 24, 2015

APS partners with insurer for power-line protection

APS partners with insurer for power-line protection

Heads up! It looks like APS is running an insurance scam now. 

Check out the Arizona Republic article below. Note this part especially:

HomeServe has an A rating with the Better Business Bureau, but has also faced 227 complaints from customers in the past three years, mostly for advertising tactics and service issues. Of 20 customer reviews of HomeServe service, 17 are negative.

Perhaps I am overly suspicious but, in addition to this being another profit source for APS, I can't help but see this as also a possible response to the "smart" meter fire issue. Could APS be offering this as a way to limit its liability? "Well, we sent you a letter offering you insurance for something that was really your problem anyway since it was on your side of the meter. What more were we supposed to do?" -- that type of thing.

In any case, I find it unbelievable that APS is allowed to branch out into the insurance business and exploit its existing customer base in this way. I'm sure there are many trusting souls who think if APS is pushing this then it's something they need. Indeed, the article says 500 people so far have bought this policy. The article says the policy is covering "repairs that can cost hundred of dollars." Is that possibility worth paying $60 per year? I don't think so. It reminds of the cashier at Home Depot asking me if want to buy an extended warranty on an electric drill. Uh, probably not!

Warren Woodward

APS partners with insurer for power-line protection

 Ryan Randazzo, The Republic | 5:58 p.m. MST December 23, 2015
(Photo: Mailer)

Story Highlights

  • APS customers are receiving an offer for insurance for exterior power lines
Arizona Public Service Co. customers are receiving a business pitch offering them insurance to cover the short power-line connections between their homes and the APS grid, and the state’s biggest utility is getting a portion of the profit.

The offer is from a company that is independent of APS called HomeServe Repair Management Corp. of Connecticut, which has run into trouble in the past for offering coverage and confusing customers as to its affiliation with municipalities.

APS officials said it was similar to sewer-line insurance offered in partnerships through some Arizona cities, and that it can prevent customers from paying out of pocket for repairs that can cost hundreds of dollars.

“Over 50 utilities in the U.S. and Canada have selected HomeServe as a preferred provider of home protection plans,” APS said in a prepared statement. “Their partners include Duke Energy, (Tucson Electric Power), (American Electric Power) and AARP, to name a few.”

The mailers recently began appearing in mailboxes of the approximately 550,000 APS customers who are homeowners. The sales pitch isn’t intended for businesses or renters.

APS is responsible for its own power lines, but customers are responsible for repairs to everything except the meter that allows the APS system to connect to their home.

For about $5 a month, or $60 a year, the HomeServe coverage protects customers’ “exterior electrical system,” which includes the boxes that hold a meter to a home and the “weatherhead” piping that protects wires between the home and the APS lines.

APS officials declined to say what the company is earning in the deal, citing confidentiality with HomeServe.

Sharon Connolly, an APS senior program manager, said not all home insurance policies cover the equipment and that some customers might want additional insurance in case the repairs don’t meet the deductible for existing homeowners' insurance and they have to pay out of pocket.
“If this repair is at or less than that, (customers must consider) whether it makes sense to submit a homeowners claim on it,” Connolly said.

APS decided to partner with the company because customers have told utility officials they wanted such a service, officials said.

“I’ve had a chance to talk to customers who had questions about this,” said David Burzynski, director of marketing. “Customers did not really understand this point of demarcation where APS ends and their responsibility begins.”

For overhead power lines, those items customers are responsible for include:
  • Wire and leading from the service entrance, overhead riser structure (weatherhead), including APS wire attachment and bracing as required, and including the customer wire from the panel up through the weatherhead and extending approximately three feet beyond to the point where APS’s overhead service wire connects to the customer’s wire.
For underground lines, customers are responsible for:
  • Wire leading from the service entrance, the underground riser from the service panel down to the point where APS’ service wire located in APS’s underground conduit connects to the customer’s wire.
HomeServe has an A rating with the Better Business Bureau, but has also faced 227 complaints from customers in the past three years, mostly for advertising tactics and service issues. Of 20 customer reviews of HomeServe service, 17 are negative.

In addition, in May the company entered a deal with the Maryland attorney general to settle allegations that it was acting on behalf of municipal governments while advertising the sale of water-line protection plans, according to the BBB. The assurance that it was discontinuing the practice "should not be considered an admission of guilt or finding of violation of law, and was for settlement purposes only," according to the BBB.

The company agreed to pay the Maryland Attorney General $115,000 as part of the deal, according to the BBB.

About 500 APS customers have purchased the additional insurance so far, officials said.
APS is sending the letters on behalf of HomeServe, and did not provide the company with customer addresses or other information, spokesman Jim McDonald said.

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