Energy providers use our fear of losing the heating or hot water, and jack up the price of their boiler breakdown insurance. Yet with just 10 minutes' work, you can cut almost £100/year off the cost of British Gas or Npower cover, with a cheaper standalone insurer.
In this guide
Best Buys:
Other Home & Energy Articles
Who needs cover?
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. There is a pretty simple rule of thumb...
Only homeowners need to consider boiler cover.
If you rent, it's not your responsibility
That's the key, but there are a few more things worth knowing...
- Some property types can't be insured. For example, mobile homes, bedsits and commercial properties are often excluded from cover.
- Get a gas safety certificate. Whether you own or rent, insist on one of these when moving in. Then each year you (or your landlord) should have safety checks carried out by a Gas Safe registered gas fitter on boilers and other gas appliances.
- Is it covered by your home insurance? Some contents insurance will include boiler cover, either as standard or a paid-for extra, so check with your provider beforehand to avoid being double-covered.
- Renting? How long would you be in the cold?. If you rent or live in social housing, you don't need to buy cover, but it's vital to establish how long, if the heating and boiler were to break down, you be left in the cold.
If it'd take two days or more to get fixed, request that's made much swifter; after all, if you're paying rent, you're entitled to have a home that, at the very least, is well-heated
What level of cover do you need?
Not all policies are the same, so when picking one, always double check conditions to check it suits you, and ensure you're not under or over-covered. But first, it's vital to know this...
Here are the big things to consider when picking a policy...
Do you want boiler-only OR boiler + central heating cover?
There are usually two types of cover offered. The first, cheaper option covers your boiler and its controls, and the second includes full central heating cover on top.
It is also possible to find plans which include plumbing, drains, electrical wiring and the cost of yearly inspections or a service - though the more covered, the more you'll pay.
Home emergency cover can be cheaper - though pays out less
If you don't want to pay for full-on boiler insurance, a potential cheaper alternative is a home emergency policy.
Here, the number of different things you can claim for is wider than boiler cover - eg, central heating and hot water; emergencies, such as burst pipes, blocked drains, leaking roof, broken windows; and overnight accommodation - but the maximum amount covered if you need your boiler fixed is much lower.
The more likely your boiler is to break down, the more cover you need
The amount that you can claim in the event of your boiler going up the swanny 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, a cheap policy covering the bare essentials and modest payout limits should do. But if you've an old, unreliable and noisy boiler, more comprehensive cover is desirable, with higher maximum claim amounts and as many annual call outs as possible.
Keep boilers in good condition - consider an inspection
Most boiler insurance policies don't cover the cost of safety inspections - but neither will they pay out if your boiler's croaked because it's not been properly maintained.
An annual service is an effective way to avoid these problems - but unless your cover includes this, you'll need to factor in £50- £80 for a standard efficiency boiler inspection and possibly more for a condensing boiler.
Do you need 24-hour cover in case of emergencies?
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 2-3 hours of labour cost - 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.
Definitions of emergency vary; at one point due to over-demand, British Gas didn't define lack of hot water as an emergency, though it does now. Another provider says a complete loss of function of your toilet is an emergency - provided you have no other working toilets.
Older boilers may not be insurable - or you'll need to pay to improve it
Most plans require a boiler to be below a certain age when the cover is bought, and others will request a boiler inspection before granting cover. If yours is old, you may want to consider the cost of buying a new boiler.
Even if you do get cover, boilers over seven years of age may be excluded from being replaced if they go 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 - more than £100 in places - to get your heating system revamped before being offered cover.
You won't be able to claim for the first 14-30 days
Be aware that almost all plans include an initial no-claims period, which typically vary from 14 to 30 days. To be fair, that's not unreasonable - otherwise people would simply sign up to plans on the day the boiler breaks down.
Best Buys: Finding the cheapest cover
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. They 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 tariff.
By avoiding energy providers' cover , you can almost halve the price, saving nearly £100/year. Helpfully, a few specialist web and phone services will do the comparison for you: just type in your details and it will find them for you in about ten minutes. The price will depend on your boiler and fuel type, plus level of cover, eg, boiler only, or central heating too.
STEP 1: FIRST CHECK TOP COMPARISON SITES
The comparison sites below are good for boiler cover comparisons, but not necessarily other products. Read Cheapest Gas & Electricity and Home Phones articles, which show you the best comparisons for those.
uSwitch for range and power
The widest, most powerful comparison is offered by uSwitch*, and it only takes a couple of minutes. Enter basic home and boiler details and it will return quotes based on the age and model of your boiler, excluding policies that won't cover you.
It doesn't cover every insurer, so it is worth trying a couple more below to ensure you get the widest reach.
Extra comparisons to increase your quotes
A few more comparison sites are worth looking at to increase the number of insurers searched but they only list policies worth investigating further - they don't provide quotes based on your info.
Energyhelpline* is a less functional search and includes fewer providers but is still worth checking as it covers different firms to uSwitch.
It may also be worth checking Boiler Choices*, which includes a couple of providers not searched by other comparison sites.
If you've time, check MoneySupermarket's* listing to see if any named policies suit what you're after.
STEP 2: GET QUOTES FROM ALL THE ONES THEY MISS
Some providers or their offers aren't always included in comparisons, so for full belt and braces you should get a quote from some of these too.
npower (plus possible 50% refund for its customers)
The npower hometeam 50* costs £10.50/mth for an annual boiler service & safety check, unlimited calls outs and repairs (£50 excess/call which is relatively standard). This is open to anyone, including non-Npower customers.
However, if you do have a dual fuel gas and electricity tariff with npower, it'll refund you 50% of the premium paid if you don't use the call out service within the 12 month contract (service & safety check are fine). You can do this for up to three years running, but always check it's still cheap at each renewal.
So if your boiler is new-ish and unlikely to break down, this is worth considering as a cheap 'peace of mind' policy - though not worth switching to npower for alone.
It's worth being aware that this is actually a 'service agreement' not insurance - read How am I protected? for an explanation of what this means.
Eon - 25% off for the first six months
Eon's Central Heating Care comes in a number of shapes and sizes, and you don't need to be a customer to get this cover.
The cheapest is £12.25 per month (but you pay the first £50 toward any repairs on your boiler), up to an all-encompassing policy including water and electrics for £25.50/mth. A 25% discount for the first six months is then applied.
It's worth being aware that this is actually a 'service agreement' not insurance - read How am I protected? for an explanation of what this means.
Plus a few home emergency policies to consider
Here, the amount of different things you can claim for is wider than boiler cover - eg, central heating and hot water; emergencies such as burst pipes, blocked drains, leaking roof, broken windows and overnight accommodation are likely automatic inclusions - but the maximum amount that will get paid out if you need your boiler fixed is much lower.
Direct Line - 15% off online
Direct Line offers 15% off its Home Response 24 policy online. It's not included in any comparison sites so you must go direct to check its prices.
It's an emergency policy so won't cover everyday problems, but does have a 24 hour callout line, and covers electrical wiring, security issues and more
Aviva Home Emergency - £8/mth
The Home Emergency policy from Aviva covers, unsurprisingly, emergencies with a 24 hour phoneline, up to £500 cover per incident and covers blocked drains, lost keys, boiler breakdown and broken windows
Swinton Home Emergency from £5/month
There are two options from Swinton, a £4.99/month Home Emergency policy and a £6.99/mth option which adds in cover for glass, locks and roof damage - plus both currently offer 3 months free cover.
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Alternatives to buying cover
There are ways to avoid shelling out every year for an insurance policy, ranging from an expensive one-off investment to the equivalent of crossing your fingers and hoping for the best.
Consider self-insurance
If you want to pay out as little as possible for cover, the best option is to self-insure. This means instead of paying for a policy each month, put the same amount into a top savings account to build up your own emergency fund, so if you have a problem, the cash is there to pay for it; if you don't, the cash is yours.
The ideal scenario here (though pretty unlikely), is you self insure until the day before your boiler breaks down, then buy cover just in time. Yet if you're not Nostradamus, you can play the odds by self insuring during the early years of your boiler's life - when it is least likely to go kaput - then after three years or so, bite the bullet and take out insurance.
Get a new boiler?
There may come a time when the cost of having an old, faulty or inefficient boiler that forces you to regularly claim on your policy, prompts the question: should I get a new boiler?
Be warned: boilers are very expensive and start from about £500 and can easily go into the thousands of pounds. 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. If you decide to take the plunge, grants for energy efficient home heating may help - see the Grant Grabbing article.
The average cost of repairing a boiler is £320, not a crazy amount more than British Gas's HomeCare 200 plan (£204), though of course there are cheaper plans.
So 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 Cheapest Home Insurance article).
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 of course paramount, so regularly have gas appliances checked by a Gas Safe registered engineer (and consider a carbon monoxide detector).
What happens if my insurer goes bust?
This is actually a bit more complicated (annoyingly) than standard procedures when companies go bust. This is because policies are one of two types: service agreements and insurance policies.
First, is yours insurance or a service agreement?
Working out whether your policy is insurance or a service agreement is crucial to understanding the protection - and also annoyingly tricky.
If you are using a comparison site, then they often state the level of protection, but if not ensure you ask the provider directly, and check if it is listed on the FSA register as an insurer.
If a service agreement, you've no protection
Service agreements - such as Npower's boiler cover - are not regulated by the Financial Services Authority (FSA) and therefore if the company goes under you have no recourse to a compensation scheme - ie, there's no central pool of cash to claim your money back from..
Any protection you have relies on the provider's solvency ie, how likely are they to go bust? The risk is pretty minimal with massive energy companies, but if it's a small insurer you've not heard of, perhaps think twice.
How it works if yours is an insurance policy
However, 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.
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If you need to claim from a bust insurer
The FSCS's main objective is to 'maintain continuity'. This means if your insurer goes bust, it will try and find another provider to take over your policy, or issue a substitute policy. However, 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.
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If it goes bust and you paid upfront
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 4 months compensation of the original cost.
