/ Home & Energy, Money

Peace of mind – is it always worth the price?

Umbrella and money

Should you invest in home emergency or boiler cover? I don’t think so. It’s far better to save up in case of a rainy day yourself rather than pay for overpriced and ridiculously limited cover.

The cold and wet August may not have come as a big surprise to many of us, although it’s still frustrating to have to turn on the central heating. To discover that it refuses to work is doubly irritating. To then find out that your insurer won’t send someone to sort it out during July and August would be even harder to stomach, especially when you’ve paid extra for boiler insurance.

Cost of home emergency cover

Our investigation into home emergency and boiler cover in the October issue of Which? magazine revealed a multitude of baffling exclusions and limitations like this.

And then there’s the cost. Some providers introduce exorbitant price hikes after the first ‘special offer’ year; some carry excesses of £150 or more. Which? members fork out an average of £245 a year on boiler-servicing contracts, even though an annual service only costs around £70, and many policies won’t cover boilers over a certain age anyway.

Is emergency cover worth it?

The majority of you with boiler or home emergency cover say you’ve taken it out for peace of mind. I can understand why. I had it before I joined Which? (but never claimed), then I read what poor value it was, didn’t renew and haven’t looked back.

For me, ‘peace of mind’ has become one of those buzzwords used by marketeers to encourage us to pay more, and usually get less…

‘Get the ultimate peace of mind with a three-year warranty for £200’ (*even though the soundbar you bought only cost £150). ‘Pay £30 a month into a 50-plus account so you can live with the peace of mind that it will pay for your funeral’ (*but if you miss one payment your family won’t get anything). ‘Pay £250 extra for home emergency cover and you’ll have the peace of mind that you’ll get help if your house is falling down’ (*as long as it doesn’t happen in June and no one’s left any lights on).

With their ridiculous exclusions, limitations and high costs, home emergency and boiler cover can join my list of ‘added extras’ (think mobile phone insurance and extended product and car warranties) that often just aren’t worth it.

It’s far better to save money each month into an emergency fund and draw on it for repairs if you need to. You may feel you’re taking a gamble, but I’d say you’re in for a welcome surprise.

Useful links

Read our advice on home emergency cover
I want to claim on my insurance, what should I do?

Comments
Member

This topic has slipped and bounced between two quite different subjects. Home Emergency Cover (never really understood what that means) and Boiler cover (know exactly what that means). Because the topic is loose in scope we’ve meandered into Home Insurance in general and the statistical likelihood of your home (or you neighbour’s) being clobbered by an asteroid strike, or at least a largish meteorite.

I don’t agree with PV-S about boiler cover: we’ve used it several times and – as we live in the middle of nowhere and been snowed in on many occasions and had most of our 25-year-old boiler replaced over time it’s been good value, since we’ve only once had to wait more than a day for parts, but never for a service call-out.

People living in easy reach of repair shops are probably fine. But when our boiler goes down and we’ve got three feet of snow our Boiler people reach us in Landrovers and carry spares.

On the topic of Home Emergency Cover, not sure what that is, as it seems to vary so much. But I would argue that home insurance in general is necessary when you live where we do. And there’s always that pesky asteroid…

Member

We are a pretty average household with Washing machine, tumble dryer, fridge, freezer, microwave, large-screen TV, central heating, etc. If we paid out for extended warranties or maintenance contracts for all of these, we’d be paying for the equivalent of a new item every year.

Our Vailant boiler was installed in 2002 and we have never had it serviced. It broke down in 2005 and I replaced the circuit board myself (it was a publicised and well-know fault with the model) for about £60 from eBay. I could have paid up to £100 a year for a maintenance contract … almost £1300 to date. By the time it dies, I will have saved sufficient for the replacement.

Just putting aside sufficient funds every year to pay for any unexpected replacement will make huge long-term savings unless you are extremely unlucky.

Member

terfar, I believe a key reason for having an annual boiler service is to make sure the combustion is taking place properly. Is this safety aspect not worth the expense?

Member

As an added point I would say that I don’t believe in extended warranties in general and apart from the boiler we never get them. But I would say to terfar that it’s fortunate you were skilled enough to not only know how to replace a circuit board in a boiler but could get one quickly. IME boilers have this knack of breaking down exactly when you need them most, and if you live in the wilds and your electricity is out at the same time (happens quite a bit in the mountains) and you don’t fancy going anywhere near a gas device, since any repairs done on one by a non-registered individual could not only have severe consequences for your home but might also affect your insurance, then paying a comparatively small amount for what amounts to guaranteed peace of mind is what I believe is describe as a no-brainer. Our boiler is LPG, too, so getting anyone in to fix it if you don’t have a contract borders on the impossible.

Member

Recommending members “not to pay for overpriced services”. Is this the same Peter Vicary-Smith that is turning Which from a charity into a commercial profit-making organisation? The same Peter Vicary-Smith that is on a package of over £340k p.a.?
The same Peter Vicary-Smith that is asking sole traders to fork out £480 pa to join the Which Trusted Traders list? It’s predecessor Which Local charged nothing and relied on members to make an entirely experience related judgement.

I have come across many Which ‘Best Buys’ have been rubbished by members own experiences. Hence the reason I suspect for Which refusing to publish (“in the near future” -meaning probably never) details of complaints they have received regarding their own assessments of consumer products.

Try typing in “Complaints procedure for Which UK” or similar combinations into the search engine on their home page. (They do not have one as far as I can see). It is high time this organisation learnt to practice what it has always preached.

Member

Hi Mike, thanks for your comment. As I’m sure you know, Which? is an independent social enterprise which means we can only continue our charitable work if we sustain our commercial success. All of the money from our commercial ventures is reinvested back into our campaigns and free advice for all UK consumers.

On Trusted Traders, all the traders have to pass our rigorous and independent assessment process before being endorsed on the site. Which? Trusted Traders is open to all consumers, offering the peace of mind of a Which? endorsement alongside user reviews.

If you do have any complaints, our Member Services team is always on hand to help with any problems – you can find details of how to contact us about any aspect of our business here: http://www.which.co.uk/about-which/contact-us/. I’m also pleased to say that we will be reporting on complaints across both our legal and mortgage advice services in our annual report, which you can find on our website when it is published next month.

Thanks very much. Now to move back to talking about home emergency cover.

Member

Patrick, All I can say is that Which survived for many years on members fees and provided a very good service. I have had several sole traders (plumbers, decorators and electricians) who have all said there is no way they can afford your charges.

As for reporting complaints on legal and mortgage services you are well aware that you have no choice in these areas, pity you have taken so long.

You have not explained why you do not publish a complaints procedure on your website.

Mike

Member

Which? have published a report on Boiler cover companies: “Each year we survey thousands of Which? members to find out which boiler cover companies keep their customers happy, and which are likely to leave you disappointed. ” This deals with servicing and repairs. In view of