Local I-Team: Digging Deeper Into Postcard Promoting Home Warranty Repair Company

MEMPHIS, Tenn. (localmemphis.com) -  You might have noticed a light blue postcard in your mailbox if you live in Shelby County. The paper offers sewer and waterline warranty coverage. The item raised questions by some Local 24 viewers.

Memphis City leaders told the Local I-Team they want homeowners to think seriously about signing up for the coverage in case of a line leak. You might have noticed in Fulton County something in your mailbox offering sewer and water line warranty coverage. 
A backhoe and busted sewer line. It's something homeowners never expect but when it hit's, it can be costly.
"It can run up to $3,000," said Larry Snyder, owner of Snyder Services Plumbing Co.
Snyder has been in business since 1985. He's done business with a lot of companies and recently he signed on with Homeserve. 
"We've been working with them for more than a year," he said.
Also doing business with the company, the city of Memphis. The city announced it's partnership with the an emergency repair company offering optional protection plans for those who enroll.
"The key here is we're offering these homeowners optional warranties," said public works director Robert Knecht. "We're hoping to educate and explain to people what the benefits are and how they work and that we're serving them. Normally, homeowner's insurance doesn't cover these items."
The Local I-Team starting looking into the partnership after viewers said they received a postcard in the mail with the city's seal. They wanted to know if it was real.wanting to know if it was legit.
"It's completely legitimate and authentic," said Knecht. 
According to documents obtained by the Local I-Team, the city signed with HomeServe on March 13, 2017. The 20 page docket shows the city received $100,000 from the company as an initial set-up fee. The deal also means the Memphis with get 12 percent of the payments from members, money Knecht says will go back to Memphians.
"We're going to dedicate portions of that in our next fiscal year to help elderly and other citizens and who are eligible for assistance," he said.
Plans range from around $6 to $12 a month and  marketed as coverage for repairs to pipes and lines that people often think are the city's responsibility. Fact of the matter, the responsibility falls on the homeowner.
"They still cover that sewer line no matter if it's brand new, if it's used, or whatever, they still cover it when you've got a policy with them,"said Larry Snyder.
"Again, this is optional," said Knecht. "They can choose to take this optional insurance and thereby shift the costs from themselves or they can say, 'No, I'm going to take care of this if it happens, it happens and I'll pay for it.'"
If you received one of those postcards in the mail the city says you can expect another two in the coming weeks, detailing the HomeServe package plans.