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22 October 2020
Energy providers use our fear of losing heating or hot water to jack up the price of boiler breakdown cover. And while some of the big six energy suppliers try to flog their own cover at inflated prices, you don't need to go with their offer. With just 10 minutes' work, you could cut costs by using a cheaper, standalone insurer. This guide shows you how.
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There's absolutely no point in shelling out for cover if you don't have to – it depends on who's in charge of heating your home. So the first question you need to ask yourself is whether you need it at all. Quite simply...
Only homeowners need to consider boiler cover.
If you rent, it's not your responsibility.
Even if you don't need to buy cover, always check with your landlord BEFORE you sign the rental contract what cover is in place so you know how long you'd be left in the cold if the heating and boiler were to break down.
Here are the rest of the need-to-knows:
For example, mobile homes, bedsits and commercial properties are often excluded from cover.
Whether you own or rent, insist on one of these when moving in. Then each year you (or your landlord if you rent) should have safety checks carried out by a Gas Safe-registered fitter on boilers and other gas appliances.
Some contents insurance will include boiler cover, either as standard or a paid-for extra. Check with your provider beforehand to avoid being double-covered or use our Cheap Home Insurance guide to find an insurer that offers this cover as part of the package.
If you've new, reliable kit, it may be cheaper to self-insure. Instead of paying for a policy each month, put the same amount into a top savings account to build up your own emergency fund. If you have a problem, the cash is there to pay for it. If you don't, the cash is yours.
You can play the odds by self-insuring during the early years of your boiler's life – when it's least likely to go kaput – then after three years or so, bite the bullet and take out insurance.
Most policies won't pay if your boiler's croaked because it's not been properly maintained, neither do they cover the cost of safety inspections.
An annual service is an effective way to avoid these problems and may even be free in the first year. After that, unless your boiler cover includes servicing, you'll need to factor in £60-£100 for an annual boiler service.
While the policies seem similar and what you get with them is similar, there is a key difference. With insurance, if the insurer goes bust you're protected by the Financial Services Compensation Scheme. With service cover, you've less recourse if the firm goes bust. In this guide, we try to refer to insurance policies as insurance and service agreements as cover, so note that when reading the deals below.
Hopefully your policy explains what it is, but if unsure, if the provider offering the cover (not necessarily the same as the firm that sells it) says it is regulated by the Financial Conduct Authority, it is insurance. Check what happens if my insurer goes bust.
Most plans require a boiler to be below a certain age, usually seven years old, when the cover is bought. Others will request a boiler inspection before granting cover. If yours is old, you may want to consider the cost of the insurance, and compare it to buying a new boiler.
Even if you do get cover, your boiler may be excluded from being replaced if it goes totally kaput. You could also find your old boiler system doesn't meet the standards requested by your insurance provider, in which case you'll probably have to pay extra to get your heating system revamped before being offered cover.
Almost all plans include an initial no-claims period, which varies from 14 to 30 days. It's not unreasonable, it stops people signing up to plans on the day their boiler breaks down.
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There are many different types of boiler and heating insurance and cover, so when choosing, always double-check what you're getting and closely inspect the conditions to make sure the policy suits you, and you're not under or over-covered. Here are the three main types.
As well as protecting your boiler, you get the added protection of damage caused to your central heating system (such as your pipes and radiators) and can replace central heating pumps, and more.
This type of policy typically covers the boiler itself and its controls against breakdown. If the damage is outside the 'white box', that's when it falls under the central heating section. But a majority of central heating claims are because of a broken boiler.
This varies from provider to provider. What we may class as an emergency is not always classed as one in the eyes of the provider.
Broad cover tends to include boiler, central heating, pest infestation and more. Yet payout limits for each can be low, eg, from £250 towards a new boiler, up to £750 – so if your boiler is the main concern this mightn't be for you.
As a rule of thumb, if your health is at risk, your home is uninhabitable or further immediate damage, such as a burst pipe, could occur to your home and you are unable to turn off the water supply, it's usually classed as an emergency.
Is a blocked toilet an emergency? If it is the only one in the home, it usually is.
Quick questions on the different types of cover
The more likely your boiler is to break down, the more likely you will need extensive cover. The amount you can claim in the event of your boiler going up the Swanee varies from product to product. Don't assume cover is unlimited, so always read the small print. Some only pay for costs up to a certain level per claim and per year (usually £1,000 or £1,500) or limit the number of call-outs within 12 months.
So, assess the likelihood of problems. If you're in a new house with relatively new, reliable equipment, then a cheap policy covering the bare essentials and modest payout limits should do. But if you've an old, unreliable and noisy boiler, then go for more comprehensive cover, with higher maximum claim amounts and as many annual call-outs as possible.
Plans usually provide a 24-hour, 365-day helpline to call when you have an urgent heating or hot water problem. They usually cover the cost of the call-out, repairs, parts and labour.
It's possible you'll only be covered for the first two or three hours of labour costs – so double-check before the call-out. The last thing you want is a hefty bill if it takes all day. Also, not all companies guarantee they'll send an engineer the same day.
Before you start looking for insurers, one big fact is utterly vital.
You don't have to use your energy provider's boiler cover!
Just because you get your gas or electricity from one supplier doesn't mean you need its insurance too. Energy providers often craftily try to link the two, but that's usually nonsense. This is an open market and you want to get your hands on the best policy at the cheapest price. Also remember to regularly compare to ensure you've got the cheapest gas and electricity tariffs.
By avoiding energy providers' cover, you can almost halve the price, saving £100 a year - or more if you are looking for a fully comprehensive level of cover. Thankfully, a few specialist web and phone services (see below) will do the comparison for you. Just give them your details and you'll get a result in minutes. The price will depend on your boiler and fuel type, plus the level of cover. You may want boiler-only, or central heating too.
The comparison sites below are good for finding the right boiler cover, but not necessarily for other products. The comparison sites below cover almost all of the major boiler insurance providers in the market.
The widest, most powerful comparison is offered by uSwitch* and it only takes a couple of minutes. Enter the postcode and it will return quotes with a brief overall of the cover provided. You can then select the type of policy you are looking for via a simple tab system.
Cover is available from under £3/mth for boiler-only cover, and from £5/mth for boiler and central-heating cover. It doesn't cover every insurer, so it's worth trying at least one of the comparison sites below to ensure you get the widest reach.
We've limited feedback in respect of using this comparison tool. Please let us know how you get on via the forum discussion.
Here are some extra comparison sites worth looking at to increase the number of insurers searched.
Check MoneySupermarket's* listings to see if any policies suit what you're after, as boiler-only cover can also be found from under £3/mth. However, the prices are often only an indicator (as the quotes could change based on your info).
For more choice of providers, try Gocompare though they are more focused around home emergency providers. It also provides quotes based on some initial questions.
There are ways to avoid shelling out every year for insurance, ranging from an expensive one-off investment to the equivalent of crossing your fingers and hoping for the best.
There may come a time when the cost of having an old, faulty or inefficient boiler prompts the question: should I get a new boiler?
Be warned. Boilers are very expensive – starting from about £600, and can easily cost thousands. If it gets to the point where you're exhausting the terms of your boiler cover, it's probably a sign that you should be looking.
Some can get help with boiler costs, but usually only if you're on a low income. See the Free Insulation & Boilers guide.
Also check out our Grant Grabbing guide to see if you're eligible for help with heating costs.
The cost of repairing or replacing parts within a boiler vary and when added up can be a huge cost. As an idea, the average claims cost for repairing or replacing a broken down boiler is upwards of £300. For example, replacing a pump has been estimated to be almost £220, a faulty fan around £230 and a replacement heat exchanger nearer £400.
Those with fairly reliable boilers and a home insurance policy which covers home emergency call-outs may simply want to opt to remain uncovered (see Cheap Home Insurance guide).
Let's be very clear. This is all about realistically examining the risk of a breakdown, whether you're able to lay out the cash when needed, and how important the peace of mind of being covered is for you.
Safety is paramount, so ensure your gas appliances are regularly checked by a Gas Safe-registered engineer (and consider getting a carbon monoxide detector).
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As an extra boon, members of specialist cashback websites can be paid when they sign up to some financial products. Once you know who your cheapest provider is, you need to check there aren't any hidden cashback deals. Do check that it's exactly the same deal though, as terms can be different. And remember the cashback is never 100% guaranteed until it's in your account.
Full help to take advantage of this and pros & cons are in our Top Cashback Sites guide.
This is actually a bit more complicated (annoyingly) than standard procedures when companies go bust. This is where boiler cover falls under one of two types: insurance policies and service agreements.
Working out whether your policy is insurance or a service agreement is crucial to understanding the protection. It's also annoyingly tricky.
If you're using a comparison site, then they often state the level of protection. If not, make sure you ask the provider directly, and check if it's listed on the Financial Conduct Authority's register as an insurer.
Service agreements – such as Npower's boiler cover – aren't regulated by the Financial Conduct Authority (FCA). So if the company goes under, you've no recourse to a compensation scheme. There's no central pool of cash to claim your money back from.
Any protection you have relies on the provider's solvency – how likely is it to go bust? The risk is minimal with massive energy companies, but if it's a small insurer you've not heard of before, perhaps you should think twice.
If it's proper insurance, providers regulated in the UK are covered by the same Government-backed Financial Services Compensation Scheme (FSCS) as banks, meaning if they go into default, you're protected. There are two main ways in which it protects you.
The FSCS's main objective is to "maintain continuity". This means if your insurer goes bust, it will try to find another provider to take over your policy, or issue a substitute policy. But if you have any ongoing claims, or need to make a claim before a new insurer is found, the FSCS should ensure these are covered.
If you've paid for cover for a year, but the company goes bust after a month or two, then you would lose out.
To protect against that, if the FSCS can't transfer your policy to another provider, you'll be given a period of time to take out alternative insurance, and 90% of any money you've already paid will be refunded as compensation via the FSCS. To help explain, here's a quick example...
You paid for a year-long policy in January and the insurer went bust in September. If the FSCS can't get the policy transferred elsewhere, then you will receive four months' compensation of the original cost.
The insurance industry doesn't have the best customer-service reputation and while a provider may be good for some, it can be hell for others. Common problems include claims either not being paid out on time or at all, unfair charges, or exclusions being hidden in small print. It's always worth trying to call your provider first, but, if not, then…