Should you insure your boiler?
While temperatures in the UK remained in the low- to mid-20s for much of August and September, it’s easy to forget how cold it can get in winter and to think that boiler insurance is a waste of money. However, if you’ve ever suffered a major boiler breakdown in the depths of winter, you may beg to differ. If you can’t decide whether to pay as you go for repairs or insure, we look at the main points to consider so that your heating won’t let you down.
It’s tempting to pay for boiler repairs as and when you need them but it is worth bearing in mind that, according to uSwitch, on average these cost around £300. Of course, if your boiler doesn’t pack up, you won’t have wasted any money on insurance.
Like travel and home insurance, many of the cheaper boiler plans come with an excess, which can range from £50 to £100 per callout. You need to weigh up whether you’d be better off paying only a few pounds a month and paying for each callout or paying a little more and choosing a plan that offers free callouts.
Tom Lyon, energy expert at uSwitch.com, says: “Going without boiler cover can seem like an easy saving to make. However, it is a gamble, which can leave you out of pocket if your boiler packs up and you don’t have money spare to pay for repairs. If you don’t have money set aside to cover this, boiler cover could give you peace of mind.”
Peace of mind was the thinking behind 63% of consumers who took out boiler breakdown cover, according to a survey last year by Which?. The consumer group compared the cost of boiler insurance with paying as you go for repairs and found that householders were financially better off paying for repairs on an ad hoc basis. The report found that more than two-thirds of those who had breakdown cover didn’t need to call out an engineer. Boiler-only insurance can cost as much as £200 a year, while an annual service typically costs around £70, which means that consumers taking out cover could be overspending by up to £130 a year.
CHOOSE THE RIGHT COVER
But if you do want the reassurance of boiler insurance, companies generally offer three levels of cover: you can either just insure your boiler or you can pay more for boiler and central heating cover – probably wise if you live in a large house or your system is fairly old. Pay even more, and you could insure your plumbing, drains and wiring, too. Whichever level of cover you choose, it makes sense to buy a plan that includes an annual service so that your home is safe and any problems are picked up early – and you’ll save on paying for one separately.
There are dozens of companies offering boiler protection, including big-name energy providers such as British Gas, npower, EDF, SSE and Scottish Power. But remember, you don’t have to take out a plan with your existing energy provider. Leading boiler manufacturers Worcester and Baxi offer cover, as do independent insurers such as HomeServe, Corgi and Domestic & General. Whichever firm you choose, you’ll need to check the small print carefully: some firms won’t insure boilers that are more than 15 years old, while some are more generous than others about paying towards the cost of a new boiler if yours is beyond repair.
It’s worth bearing in mind that there is no reward for loyalty: cheap offers are restricted to new customers and for the first 12 months – so you do need to shop around each year. Your first port of call should be comparison sites such as MoneySuperMarket.com, uSwitch.com and Energyhelpline.com but also look out for deals from insurers that you won’t necessarily find on these sites.
CHECK YOUR HOME INSURANCE
Before you sign up for a boiler plan, it’s worth double- checking that you are not already covered by your buildings insurance, or to consider adding this to your existing policy. Many insurers offer a home emergency cover as an optional extra – but it is just for emergencies, rather than routine repairs and doesn’t include an annual service. For example, LV=’s 24-hour home emergency cover costs up to £50 as part of its building insurance policy. This covers boiler breakdown and plumbing emergencies, such as leaking pipes, restoring hot
water and heating where possible. Lost keys and pest infestations are also included, with up to £500 cover for each emergency without any excess.
Alternatively, some insurers offer their own standalone breakdown cover, which can be competitively priced.
For instance, at the time of writing, Aviva’s gas boiler breakdown cover with annual service is operated by Homeserve but comes at an introductory price of £2 a month for the first year, with a £95 excess, which is cheaper than HomeServe’s own plan.
REPLACE YOUR BOILER
If you have an old boiler, buying an energy-efficient new one could prove more economical in the long run. According to the Energy Savings Trust, boilers account for 55% of your energy bills and you could save around £340 a year replacing a G-rated boiler without controls with an A-rated condensing boiler with a programmer, room thermostat and thermostatic radiator controls.
Not only will you save money on your energy bills but new boilers can come with warranties of up to 10 years – though five- and seven-year warranties are more common – so you’ll save money on boiler insurance, too. To give you an idea of how quickly you can recoup your costs, I recently replaced an old boiler in a studio flat with a new Vaillant combi boiler. It cost me £1,850 for the boiler including labour and it came with a seven-year warranty – so long as I have the boiler serviced each year, which costs around £70. I was paying British Gas £311.49 a year for its Homecare 100 plan (including an annual boiler service), which I have now cancelled. By saving £240 a year on the Homecare plan and reducing my energy bills by, say, a conservative £100 a year, the boiler will pay for itself in just over five years.
As labour costs for boiler installation are high, it is essential to get quotes from at least three companies – but expect big-name energy providers to charge more than your local Gas Safe engineer. British Gas quoted me £3,100, some £1,250 more than Hertfordshire-based firm IS Plumbing, Heating & Building Services charged me.
Under a government initiative, the Affordable Warmth Scheme provides funding for a new boiler (not new radiators or thermostats) for householders in need in England, Scotland and Wales. However, there are tight criteria: you must live in a house, not a flat, receive means-tested benefits, and your existing boiler must be both inefficient and faulty. For more details, visit Affordablewarmthscheme.co.uk.
“It took three callouts to fix our boiler”
Chris Thomas, from Farncombe in Surrey, recently had a problem with his boiler, which wasn’t heating up his hot water. He has a British Gas Homecare 200 boiler plan, which costs £300 a year to cover the boiler and two gas fires, including an annual service. He pays an excess of £99 for the boiler and £50 for each of the gas fires.
An engineer came round to repair the boiler and said Chris would have to wait 10 minutes for the hot water to start coming through. He left his mobile number and said to call if there was any problem and he’d come back the same day. After 30 minutes, when the hot water was still not coming on, Chris called the engineer several times and left a message but he didn’t call back. He then called British Gas customer services.
“Luckily, another engineer was able to come out later that day. This one did stay long enough to check that the issue had definitely been resolved and it all seemed fine, so he left,” says Chris.
“It later became apparent that while we had hot water again, the central heating was coming on when the hot water was switched on – not something we wanted in July. This meant another call to British Gas to arrange for yet another engineer to come round and fix this issue, which was resolved and, fingers-crossed, it all seems OK now.”
He took out the plan because his boiler is quite old, so he was not confident about its reliability. “When I originally looked into the cost of having the boiler and fires serviced annually, I found that it was comparable to taking out a plan, which includes the annual service, so it made sense to do it this way,” he adds.
“Our policy is up for renewal soon, so I will be shopping around, particularly after the palaver we experienced recently.”
This is more usually a feature of car insurance but it can also crop up in contents, mobile phone and pet insurance policies. An excess is the amount of money you have to pay before the insurance company starts paying out. The excess makes up the first part of a claim, so if your excess is £100 and your claim is for £500, you would pay the first £100 and the insurer the remaining £400. Many online insures let you set your own excess, but the lower the excess, the more expensive the premium will be.
This type of insurance covers the structure and fabric of your property – the bricks and mortar, not the contents (for which you need contents or home insurance). If you have a mortgage, the lender will insist you have a suitable buildings insurance policy in place. Many lenders offer their own building insurance policies, but you don’t have to buy it from your own lender but you have the option of shopping around. The insurance covers you for the rebuilding costs, not the market value of the property.