Sunday 9 October 2016

Landlords Home emergency insurance. Is it good value?


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.


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.





No comments:

Post a Comment