City enters into agreement to provide water leak insurance

Aldermen Jerry Lowery and Hoyt Jones vote against proposal

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The city has spent the past several months discussing the possibility of providing access to water leak bill insurance to their customers whose water service comes from the city’s utility district. On April 1, the decision was made to authorize the mayor to enter into an agreement with Water Leak Relief LLC, out of Crossville.

In previous meetings, the board had voiced concerns about pricing, coverage, and most recently about the fact that the chosen service would provide customers the ability to opt-out of the insurance, with some aldermen saying they would prefer a service that offered an opt-in policy instead. At the March 18 meeting, the decision had been made to table the discussion so that representatives from the Crossville company could attend the April meeting to answer any remaining questions.

City administrator Brad Hennessee introduced Jeff Dyer and Will Ridley, president and owner of Water Leak Relief LLC, to the board during the April 1 meeting.

“We looked at some of your concerns by putting in a one-year guaranteed rate lock for you guys as you requested,” Dyer began. “We are here to answer any questions about the program you may have”.

Alderman Jerry Lowery immediately asked the question that the board had been debating for months.

“Why can we still not allow people to opt-in instead of enrolling them all at the same time? Lowery asked.  “I know you guys have a great answer because it’s your money and your business, but I’m just curious to this board as to why we are continuing to force - and I’m for this - insurance is a great thing - but I still don’t think we should force, enroll, people into any kind of fee - I know it’s minimal – being added to their bill without informing them first.”

Dyer responded to Lowery saying the company completely agrees the city should inform their customers before the program begins.

“That would be part of the program,” Dyer explained. “We would have you send out information first before enrollment begins. We would recommend that they get notification that the program is coming.”

He said that would provide customers with a time period to opt-out before the program engages.

“And even if it engages that first month and they decide ‘hey, I don’t want this, I don’t like this fee,’ then they can still opt-out, and they won’t see it anymore,” Dyer added.

“My question is why can’t we have an opt-in program?” Lowery repeated.

Will Ridley, the company’s president attempted to answer Lowery’s concern.

“Industry-wide this is a standard,” Ridley said. “The business just won’t work with an opt-in, but I can promise you that opt-out, the customer will get a refund of what they paid if they do so in the first 30 days. After that, they can still choose to opt-out at any time, and they will not be charged any more in the future.”

Ridley informed Sparta Board or Mayor and Alderman that Water Leak Relief LLC provides services to seven cities and has a 97 percent participation rate.

“We have never not allowed somebody to opt-out,” he claimed. “If you have a customer opt-out, no problem, we don’t hassle them. We send you a report every week letting you know what customer opted out, what they said – if they were happy or mad about the program. We record our calls and give you guys the transcript. So, if you have a constituent that is upset about the program, you are going to know about it.”

“I am for that, but it still doesn’t answer the question,” Lowery responded, and then said he had other concerns. “Let me throw the rest of the stuff out there that I’m not real happy about.”

Lowery referenced the company’s privacy policy as presented in the sample agreement they had presented to the city, in which he said that it stated any information collected, including address, telephone number, and other data, could be given to third parties that provide services on the administrative behalf of Water Leak Relief LLC. Lowery read a section of the document that said the customers’ data could also be used to keep them informed of other services offered by the company.

“Does anyone want any more robo-calls?” Lowery asked his fellow aldermen. “I have a real problem of putting that on our people.”

Dyer and Ridley answered Lowery’s complaint stating they provide the information to the company that handles their claims and attempted to assure him the customers would not receive robo-calls or sales pitches. They also added they would be happy to “tweak” the language of the document to reflect that if it would ease the board’s concerns.

Before anyone from the board could respond, alderman Hoyt Jones brought up another concern.

“I have a question,” he stated. “It says that you give up your right in a class action suit - there will not be a jury trial. That’s illegal.”

Lowery supported Jones by adding his own concern, “The seventh amendment says every American has the right to a jury trial. I don’t think it’s a smart move for city aldermen to start waiving civil rights of citizens of this city, and this country.”

Lowery reassured everyone that he is in support of the water leak insurance, stating that he feels it is a great product.

 “I just have a problem with some of the language,” he said.

“The terms and conditions are for the end user - your customer,” Ridley said, answering both aldermen. “What we are asking is that the customer does not request a jury trial over a two-dollar-a-month charge. Especially when we are willing to refund that fee.”

Jones asked the City of Sparta’s attorney, Lynn Omohundro, her opinion, to which she responded there are many circumstances and situations where a jury trial is not held. When Mayor Jeff Young asked her if, in her opinion, the contract would be violating the rights of Sparta’s citizens, she explained in further detail.

“They don’t have to be a part of the program if they don’t want to be a part of the program,” she told the mayor, but added that she sees very little possibility that somebody isn’t going to want to participate. “I’ve heard the complaints when they have had leaks and have to pay it.”

The program in question has a coverage that comes with a $1,500 limit and will be billed along with the current utility bill using the following fee scale:

  • Residential (all): $2.03 per month
  • Commercial (single occupancy): $3.96 per month
  • Commercial (multiple occupancy): $7.33 per month

“We will pay up to $1,500 of a water bill due to a leak,” Ridley explained. “This is not for pipes, although we do have a separate program that individuals can choose to purchase for the line that runs from the meter to their house.”

Ridley said the line insurance covers up to $10,000 of repair cost and comes at a cost of $4.90 per month to the customer.

“We ask you to give a recommendation to your people of Sparta, but this is an additional program that they can call us and ask us for themselves,” he said.

After listening to all of the questions and responses, a motion was made by Vice Mayor Jim Floyd that the board authorize the mayor to enter into the agreement with Water Leak Relief LLC of Crossville, TN. Alderman Judy Payne seconded the motion, which was passed with a five to two vote in favor of the contract. Jerry Lowery and Hoyt Jones cast the “no” votes.    

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