City to get kickback for recommending insurance products

An Illinois city is openly endorsing a provider of sewer and water line insurance – and is even getting commission out of the deal.

Kankakee, IL is allowing Utility Service Partners to utilize the city’s logo in the insurance company’s mailings. The insurance provider sends out letters three times a year to residents, informing them that they can purchase entirely optional insurance for their utility lines.

For endorsing Utility Service Partners, the city will receive a monthly royalty of up to $1.50 for each homeowner who signs up for the coverage, Daily Journal reported.

“This is the time of year we start getting calls from people about pipes freezing and breaking,” Kankakee mayor Chasity Wells-Armstrong said in an online town hall statement. “Our team will go out and look at properties (with pipe problems) and find that lines aren’t on city property. The residents get very upset when we tell them.”

Wells-Armstrong explained Kankakee allowed Utility Services Partners to use its logo because the city has checked out the insurer.

“They’ll cover your lines and provide you education,” she explained.

Kankakee is not the only city that has signed up a deal with Utility Service Partners. The insurer is cooperating with the National League of Cities (NLC) – a group composed of cities across America (of which Kankakee is a part of) – to allow member cities to endorse the insurer’s services.

In a statement five years ago, a spokesperson for the League explained that the arrangement between the NLC and Utility Services Partners is “not purely a financial consideration.”

“They have a good track record as a company,” the spokesperson additionally claimed.