Boiler Cover Doesn’t Pay for Most Customers

Boiler cover is cost-effective for just 1% of policyholders, consumer champion Which? claims, as it urges homeowners to ditch insurance policies and simply pay for repairs and servicing of their heating systems as needed.

The consumer group quizzed more than 7,000 of its members both with and without boiler cover about their experiences with boiler servicing and repairs.

It found that its members pay an average of £297 per year for boiler cover, which is typically bought through the household’s energy supplier or part of a home emergency add-on to a home insurance policy. However, just one in five (21%) reported needing to call an engineer for boiler repairs in the previous 12 months.

One of the perks of boiler cover is a complementary annual servicing, recommended to keep your boiler in tip-top shape for the winter and to catch minor faults before they escalate. However, Which? found that members without boiler cover paid an average of just £87 for both their annual servicing and any needed repairs during the year. This means most people could ditch their boiler cover and come out ahead.

In fact, Which? found that boiler cover was cost-effective for just 1% of its members. Policies from market leader British Gas were even less cost-effective, with just 0.4% of members coming out ahead.

So why are so many homeowners paying for expensive policies that don’t deliver savings? Providers often lure in customers with introductory deals then hike prices after the first year and count on them not to bolt.

70% of customers in Which?’s sample reported that their renewal quotes were more expensive than their initial quotes. 21% of renewal quotes were the same as they had been paying and just 3% were lower.

This loyalty penalty is particularly acute with British Gas, which provided the cover for the largest number of customers in Which?’s survey and is already known for its steep prices. 

Customers who had been with British Gas for one to two years paid, on average, 7% more for their boiler cover than customers with other companies. But after three to four years, their boiler cover premiums were 19% higher than customers with competitors.

Customers can often haggle these prices down at renewal but only a quarter (27%) try to negotiate, the magazine found.

Which? says the many customers would save money by ditching their cover and using independent gas engineers for annual servicing and repairs as needed. 

If customers do want boiler cover, they should see if they can get it as an add-on to their home insurance policy, which may be cheaper and can sometimes even include cover for boiler replacements. They’re also urged to shop around and not to accept higher prices at renewal.

Lisa Barber, home products and services editor at Which?, said: “Year after year, our research has found that boiler cover is a false economy and most people would be better off paying for an annual service and repairs when needed.

“If you do prefer having boiler cover for peace of mind, then it pays to shop around and haggle with your current provider to make sure you’re getting the best deal available.”