All landlords have to make a call on how they will
handle the upkeep of their property with boilers topping the list of issues
that give the most cause for concern. Well that’s not surprising as it can be a
very expensive fix when the break down.
We have taken a good hard look at the boiler
insurance market and here is what we have found.
Banks and insurers
see household emergency cover as a way of making extra profit from customers.
Policies can cost about £200 a year and are supposed to cover emergency
problems, such as a boiler breaking down or a pipe bursting.
Experts warn that
polices are riddled with exclusions, for example, most providers do not cover
lime scale damage and heating controls. Some will not pay out for boiler
repairs during the summer or cover boilers more than ten years old. The limits
on payouts can vary wildly.
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Energy providers are no better. You could find that your old boiler
system doesn't meet the standards requested by your energy provider, in which
case you'll probably have to pay extra – more than £100 in places – to get your
heating system revamped before being offered cover.
So is insurance always the
answer?
Not according to consumer
group ‘Which’? The consumer group analysed the costs of cover and compared this
with the average amount spent calling out engineers when needed.
While boiler breakdown cover,
including an engineer's annual check-up of boilers and systems, typically costs
between £150 and £200 a year, most households do not need to call out an
engineer for repairs each year, according to Which?
Vera Cottrell,
financial services expert at ‘Which’ states; ‘Some people may feel reassured by
having a home emergency policy or boiler cover but it doesn't
make sense financially’.
Over 40% of Which
members have at least some type of boiler cover and most say they chose to buy
cover for peace of mind or value for money. However, based purely on cost,
you'd probably be better off paying for repairs on an ad hoc basis - rather
than paying monthly for boiler cover.
Our annual survey
of boiler owners shows that the average gas boiler has almost a 50% chance of
needing a repair in its first six years - although this drops to less than 40%
if you buy a boiler from the one of most reliable boiler brands.
Which analyzed the
results of their boiler reliability survey against the cost of a typical boiler-servicing
contract (£183)? They found that 93% of people would be at least £50 better off
in any given year if they didn't pay for a boiler-servicing contract, and
instead had their boiler annually serviced by an independent repairer and paid
for any repairs and faults as they happen.
You can also cut
the cost of expensive repairs by making sure you buy a boiler from a reliable
brand.
Also watch out for
attractive introductory prices. Many boiler cover companies quote only the cost
of the first year of cover, and then as much as triple the amount they charge
in the second year. Always ask the
provider what the cost of its contract is beyond the first 12 months.
While boiler
breakdown cover may provide you with peace of mind, you should also bear in
mind that not everything will be covered by a boiler-servicing contract. A
typical example is where sludge build-up occurs in your boiler. This is not
covered by any of the companies Which looked at and would require a full system
flush, which can cost on average more than £15
Check your policy for the following
exclusions:
- · Boiler age - if you have an older boiler you may find not all providers will accept you as a new customer
- · Boiler life - existing customers should also be wary. Some providers won’t renew the cover if your boiler reaches a certain age.
- · Call-outs - if your boiler breaks down twice in a year, some policies won’t cover you more than this.
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