/ Home & Energy, Money

Has a Homeserve flyer made its way through your door?

A burst water pipe

To my shame, I have little idea about what’s covered by my home insurance. Will my fence, blown down in this week’s storms, be repaired under my policy? Would my water company cover me for a burst pipe?

A lot of people buy insurance to cover life’s emergencies and many of them do through a company called Homeserve, which provides home emergency cover to more than two million customers in the UK.

This week Homeserve was fined £30.6m by the Financial Conduct Authority (FCA) – the largest retail fine ever handed out by the regulator. The fine was imposed for ‘systematic, and long-running failures’, mainly mis-selling of insurance policies from 2005 to 2011.

Mis-selling to retirees and the vulnerable

Homeserve’s failings were particularly serious in the FCA’s view because a ‘significant proportion’ of its customers were of retirement age and vulnerable.

Many of Homeserve’s customers will have heard about it through their utility company. In 2012, we found that nine of the UK’s 12 biggest water companies promoted Homeserve’s pipe insurance in direct mail promotions, even though some of the companies had their own free insurance policies’.

And Homeserve itself says its business is built on ‘long-term affinity relationships with utility companies and appliance manufacturers’.

Direct mail from your water company

This promotion by water companies is still going on. I live in London and a recent letter from Thames Water urged homeowners to buy Homeserve protection against unexpected plumbing and drainage repair bills.

It told them: ‘Around 179,000 homeowners in the Thames Water area already trust Homeserve to solve such problems, so why not arrange cover today?’

Homeserve says it has cleaned up its act since the mis-selling days. It’s 2013 annual report says it has made good progress with customer service and satisfaction, and has 40% fewer complaints than the previous year.

But have customers’ experiences changed? Have your utility companies tried to sell you insurance from Homeserve or any other insurers? Did you take up the offer – and have you checked to see that the insurance covers you for your needs? Did the company pay out when you needed to make a claim?


It astonishes me that Homeserve have been able to absorb a £30m+ fine and continue trading. It shows how much money is being made through intense selling techniques creating and then targetting false anxieties. It might be called “mis-selling” [a misnomer if ever there was one for it is far from inadvertent] but it is tantamount to deceit and predation.


I am impressed by the fact that the FCA are handing out some worthwhile files, totalling £69 million so far in 2014.

Maybe Ofgem could gain more respect if they did the same.


A quick look at the company’s statutory reports and results shows that they made a profit of over £78m in 2013 in the UK which is the bulk of their business [they also operate elsewhere in Europe and in the USA]. They anticipated [and factored into their profit expectation] a fine by the FCA of the order of £6m. Interestingly, under the disclosure of “principal risks and uncertainties”, regulatory intervention is a major element. It appears that they have clearly been struggling with “restoring our customer focused culture in the UK, with improved customer satisfaction and a significantly reduced number of customer complaints”. They have lost a lot of customers over the past few years but think their new strategy is starting to turn that around, and one way of doing that seems to be by focussing more on direct marketing and the internet, with less reliance on capturing customers via utilities and appliance manufacturers. I hope this big fine has not only taught Homeserve a lesson but raised the bar against other companies who might wish to exploit customer vulnerability.

Gwyneth Bull says:
26 February 2014

I cancelled Policies with Homeserve in March last year after they kept adding on to the price and Policies. They offered to lower my premium from £110.40 to £70.00(which says quite a lot). I cancelled anyway. I have now received renewal documents telling me they will automatically renew my policy in March. This has been sent with the Yorkshire Water and HomeServe logo on the letter.

Al.Bailey says:
23 July 2016

I cancelled my policies with homserve in Feb 2013. after the company had added two policies to my bank account without my permission.

alex wilson says:
13 March 2014

I had several contracts with HOMESERVE until I cancelled in 2013, there were so manyn exclusions it was a complete waste of cash . Since DEC 2013 I recieved letters from them stating th at 3 of the contracts were in question, and enclosed 2 cheques ,£10 and £57 ,which I have no intentions of accepting,ive contacted WHICH, regarding what i should do now ,would appreciate any advice/ comments from other members

Deeply suspicious says:
2 June 2014

It is seriously worrying that Water Companies continue to do business with Homeserve.
If I have problems with Water Supply-I know perfectly well I am wholly responsible for putting it right. Who do I complain to –and how can I stop Affinity Water abusing their public trust as they waste money endorsing rip-off businesses .

Alison4y says:
23 July 2014

We took out Homeserve plumbing and insurance cover several years ago and so hoped that a recent burst pipe would be sorted quickly and efficiently. What a nightmare: It took 12 separate visits, not including a number of no shows, before an adequate repair was carried out. Only two of the visits were necessary. 12 days off work, and miserly offer of compensation

Deeply suspicious says:
23 July 2014

Remember that the Company is basically only probably a co-ordinating office with tele-advisors-who link your needs into their pre-approved locally sourced traders who then operate for you. . Thus -first visit is for them to find out what”s wrong, -they then report back to HQ. Second visit booked by HQ with you and then acted upon by trader. Sometimes trader does not turn up-so you ring HQ and it just goes round and round in circles.
In actual fact you would be better of finding a few local traders yourself and only ring these when you have problems. It’s cheaper and less hassle.
For me the only reason to use a company like Homeserve is if you were seriously unable to find a local tradesman(urgently) and you had no alternative but to rely on their set-up.
Another point worth mentioning-if you were a reliable good professional trader-why the hell would you want Homeserve or their likes to take your profit?
This is why I am deeply suspicious of any utility company that is enhancing it’s profits by recommending customers take out emergency service agreements with organisations like HS.