Warnings sounded over offer of water line insurance
Better Business Bureau has fielded complaints
As for HomeServe, it has a "D" rating with the BBB and consumers in several states have filed complaints with their Attorney General's regarding the company's marketing. HomeServe has reached settlements with those states with no admittance of wrongdoing. The settlements required them to make it clear in their marketing materials that they were not affiliated with local water companies in those states.
So if you get one of these letters, toss it.