/ 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?

Comments
Diane taylor says:
3 February 2018

Ok writing on behalf of my elderly parents who recieved a letter from thames water for plumbing and drainage systems and repair to water supply pipes 1.00 a mth for first year then 8.25 a mth thereon. I have not let them take this up because its expensive and i think there insurance covers this. This letter is dated december 2017. This is done by homeserve. Would i need trace and access on my home insurance? Seems to me that its exploiting money from the elderly.

I can’t comment on Thames Water but everyone in our area [Anglian Water] gets a Homeserve flier with their water bill and also on its own from time to time. I wouldn’t say they are preying on the elderly especially, but that age group might be more susceptible to the concerns over the cost and potential for underground service pipe repairs, particularly if they are exaggerated as might be the case.

It would be sensible to check what is covered in your parents’ buildings insurance – there could be an excess that would have to be paid in any event. Pipe damage to sewers and drains due to subsidence [for example] would be covered [subject to an excess] by the buildings insurance, as would any damage to service pipes caused by an extreme event; in general, underground service pipe breakdowns are rare. Accidental internal plumbing breakages are usually covered in buildings insurance policies or within a heating system maintenance contract. There is no point in taking out separate insurance for unlikely events and I would advise your parents to maintain a good insurance policy for their property, maintain the property to a good standard [especially during the Winter] and look out for any unusual occurrences, and to put away about £50-100 a year as an emergency reserve in case something happens.

Monson Man says:
20 February 2018

I had the complete policy between 2007 and 2015, which I was sold over the phone. Can any one please confirm who I can e-mail at Homeserve to confirm if I qualify for compensation /

It would help if you could tell us what you are seeking to be compensated for, Monson Man. Were you ‘cold called’ in 2007 or had you contacted Homeserve first?Were you not given a ‘cooling off’ period after the policy was issued? Or was the cover not as set out in the documents you will have received?

Another mis-selling scandal in the making? I wonder where the line is drawn between us making a considered choice, and being defrauded. Personally, I’ve looked at Homeserve and chosen not to purchase it because it offered poor value, compared to what I perceived as the risk and likely cost of me making a repair payment.

Tessa Calvert-Linnell says:
7 March 2018

I get regular and tedious invitations to take out plumbing and drainage cover from Homeserve but via South Staffs Water, a bit confusing. Why are they pushing it and so often? Have decent home insurance – so, like Malcolm haven’t accepted so far. Have tried to research their current reputation and trace any comparatively recent investigations about the company, but no luck so far…

Andy lobb says:
16 March 2018

I have today confirmed with Southern Water that the responsibility for “SHARED” sewage pipes remains as declared in their guide of 2011 – the first set of pipes taking water/effluent away from the property eg. from the WC to the first manhole or to the edge of a neighbours property, are “private” and the responsibility of the owner. All others are owned by Southern Water and remain their responsibility.
The recent circular from Homeserve ( famously fined £30.6 million pounds by the FCA for “systematic and long-running failures” between 2005 – 2011 ) alarmed me as it appeared to announce the end of that agreement. However, the diagram at the top of the letter is misleading for “shared” users when it shows owner responsibility continuing from the home to the major public sewer and only a minuscule asterisk takes the reader to the equally small advice that shared drains are “usually Southern Water’s responsibility.”
All worried pipe-sharers may therefore ignore subsequent alarms concerning a “blocked drain” and £419 for a “collapsed drain.” And the assurance that it is “… generally down to you to look after your… drainage system.”
Southern Water were clear in affirming no change in their responsibilities but recommended that any complaint be directed to Homeserve. As it is SW’s logo, and none other, displayed prominently at the top of the letter I feel they have a larger responsibility but ….

Simon says:
23 March 2018

If something serious is wrong they are not effective at repairing, and ALWAYS take several visits to begin to deal with the problem. One main ways that they are directed appears to be to tell the operative to effectively make you have a power flush (£600) without which they will not guarantee their work. If there is much of a problem in any case it is exceedingly difficult to get call satisfaction in their call centres and to get sonneting escalated, as they call it, is the work of a Titan.Homeserve should be avoided like the plague, they are a business creaming off a top layer of money over and above others.

[Sorry, your comment has been edited to align with our community guidelines https://conversation.which.co.uk/commenting-guidelines/. Thanks, mods.]

Simon-A power flush is not normally required in a large bore pipework central heating system and is usually done in microbore systems when it has been proved that the radiators/valves are not at fault due to old age ( corrosion ) . Using the “excuse ” it needs a power flush is exactly the same as CPCW telling its customers they have to buy laptops with the Windows system stored on a USB drive at a cost of £40+. Its the same methodology and just as unethical. Will anybody being asked to -you need a power flush by Homeserve post on Which convo please ? Guess where one of the places to click on about this is ?? Which convo , thats right they have a convo on Homeserve being fined for this action. Money saving expert also has complaints on this subject, they have a 40 % share in “Checkatrade ” .

A power flush can be useful on neglected standard bore heating to remove accumulated iron oxide that can be impeding water flow.

Corrosion inhibitors are very effective in preventing corrosion and ‘black sludge’ in central heating systems. If not protected, radiators can start leaking. Magnetic traps, often incorrectly referred to as ‘filters’, will remove iron oxides and avoid circulation problems, but they do not stop continued corrosion.

Boiler manufacturers often insist on power flushing prior prior to installation for their guarantee to be valid. That is understandable and should be borne in mind when comparing the cost of new boilers.

Dave S says:
24 April 2018

An automatic renewal notification of water & plumbing cover from Homeserve wanted to lift the premium from £43 to £154 (no claims made). When challenged, they immediately agreed to reduce the premium back to last years level. Why did they agree? In their words “because there were no claims made last year”. So much for not linking premiums to claims history story. If their renewal is unacceptable then just pick up the phone and directly challenge them.

This highlights the danger of automatic renewal of insurance cover, Dave. Even at £43 per year, it might be more cost effective to save your money and pay for any repairs you need.

Patrick Willis says:
5 May 2018

I had a policy with HomeServe for several years only for water supply pipe until 2018, without advising me they changed my policy from &63.12 to £99.00 when I questioned the customer service I was told they do not have the cover I was on ie. water supply pipe, If that is not miss selling what else can you call it. they are at it again.

Ditto Patrick yes it says £99 or nothing , I was going to cancel it but my wife pointed out that it now includes a good few additional cover . The original was for digging up the garden to connect a new mains feed pipe as the Water Board only cover the street mains but now it includes blockages and leaks in drains and pipes . It just so happens I am at this moment staring at the same letter from them – blocked sinks-drains and toilets- leaking overflows-claim ceiling raised from £3000 to £4000 plus collapsed external drainage pipe -washing machine and dishwasher hot and cold water inlet flexible pipes – leaking radiator valve – leaking internal plumbing -your water supply pipe and reinstatement of surface. I am sure the one that would appeal to females is the blocked toilets, thats a major . Its all inclusive no hidden fees -24 hour help line 365 days a year – repairs guaranteed for 12 months – not covered -showers guttering soak-ways -loss of heating/hot water .As I said I was”Mr Angry ” with the ultimatum but my wife talked me into it.

T McGeary says:
7 August 2018

I feel I’ve been ripped off for years.For my Homeserve Cover3 I was just asked to pay £258 ! I told them it was already too expensive and that I think years back I had phoned to cancel and nothing was done about it. It then just became something I never got around to dealing with. We have had a two washers changed. Whoopee. That has probably cost us around a grand or so per washer! Finally cancelled online this morning. Wish I had succeeded in that years ago. I have requested a copy of the online chat just to have evidence.

You are (or were) paying for peace of mind and that does not come cheaply. Some will win but most will be losers. I had not called out a breakdown cover service between 1989 and the end of last year – just paid the annual premium. 🙁 On balance I think it’s worth having cover in case I have a problem on a motorway.

If you are paying for extended warranties on household appliances it might be worth taking the risk of not renewing the cover. Here again you are paying for peace of mind and the insurance company is not there to lose money.

True enough business is there to take our money. I would never do without breakdown cover just in case. But we have had a few tows home and home starts over the years so I don’t at all begrudge having it. HomeServe though I think are taking the Michael. If I have a problem I can afford to pay for it, especially as I am saving almost £260 a year I can put towards any bill. 🙂

As a caution to consumers, I would never rely on just a phone call or chat message, or even an e-mail, to notify an important change in a contract [like termination] – especially where there is a regular payment arrangement in place. It is always best to send a formal letter as a back-up in case the issue is disputed or the instruction ignored.

I cannot recommend it because I have no personal experience but I think that better than Homeserve is the appliance cover and other domestic repairs and maintenance cover that British Gas and others offer within a maintenance or service agreement. Homeserve relies on creating a sense of fear of a major and extremely expensive breakdown in your service pipes and then offering ‘peace of mind’ to cover it. In practice such incidents that cannot be pinned on another body such as the council or the water supplier, or are not covered by a home insurance policy, are very rare.

Yes, it is a case of looking at the cost and likely benefit. There is always going to be luck involved.

I could have spent a fortune on insurance cover on water supply pipes and extended warranties on household goods but might never have made a claim. It’s better in my opinion to be prepared to pay out for repairs and replacements, unless you are very unlucky.

The problem is you gamble a smaller annual premium for a potentially much larger bill, possibly when you don’t have the money for a repair or replacement.

The disciplined approach is to avoid insurance on domestic products and pipes (which may well be covered by your household insurance) and to put the premiums you would have paid into a separate account that you don’t touch – until you need to pay for a repair. But who does that?

I advised someone not to take out a multi-appliance policy, but since they did their dishwasher, a fan oven element,and a control panel on a washing machine were all replaced. It’s in the luck of the draw – and the likely quality of the appliances. These were supplied with a new build so were lower-end.

My undisciplined approach is to keep some money in instant access accounts and just top that up as soon as possible if it is used. It works for me.

At least I have the chat transcipt this time. 🙂

The problem is for those who are poor, and find it difficult to save spare cash just in case. More information to allow fault diagnosis and diy repairs would be helpful. The products belong to us to do with what we will, but under our own responsibility.
It would be useful if Which? did a full review of all the insurance / extended warranty options available and considered the types/makes of appliances most likely to benefit.

I have a contingency reserve, Malcolm, into which I pop the income from certain investments that I inherited from an uncle a very long time ago [I hope my nephew and niece are not reading this].

When I lived in London in the 1980’s I received a notice from Thames Water that the valve on the service pipe from the water main was leaking and that I was required by law to get it repaired. I decided to dig down to the valve and expose it leaving a large enough cavity for a technician to work in in order to replace the valve. I then arranged with TW to turn off the water supply from the street valve while the valve was replaced. I cannot now remember the cost of having the valve replaced but it was considerably reduced by my doing all the manual work [involving shifting and setting aside over a cubic metre of heavy London clay]. Nowadays a mini-digger would make light work of this operation. I do not know why the valve leaked but there had been subsidence in the area after a long period of dry weather and that might have put pressure on the pipework and dislodged the connection to the valve. A similar potential possibility could exist today in certain areas with clay soil so there is a lot to take into account in deciding whether or not to takeout special insurance. It is also wise to study the terms and conditions to make sure the policy covers the situations you might anticipate and whether there are any significant exclusions or excesses.

Being poor can be a self-perpetuating condition but there are many who could with a little self-control maintain a reserve to cope with unexpected bills.

Without legislation, companies are not going to provide the sort of information that would be helpful to those attempting to do DIY repairs and the introduction of integrated assemblies has made it more difficult to carry out cost effective repairs.

TMcGeary – Welcome to Which? Conversation. There are plenty of topics that might be of interest. You are right to keep a transcript of your ‘chat’. Not everyone does.

Andrew Hudson says:
16 March 2019

Unless the cost of repair is 4k then you wont

I was conned into buying this cover with a £12 initial annual premium, which was increased to £99 after the first year. Fair enough, I was told that it would go up after the initial teaser to get me in as a customer.
But I was not told of the increase that would come at the end of the second year.
On Xmas Day afternoon I received a renewal email advice that my £99 premium was going to increase to £272.40 in the New Year. The email was very attractively presented, lots of pictures and red colouring, with lots of statements as to how wonderful HomeServe is, peace of mind and all that. I had difficulty finding the premium amount.
But when I did and saw that it was a 275% increase – Wow!
I am 73 years old and they send the renewal advice on Xmas Day. Does that smell of something sneaky? Or maybe just disgraceful, shameful or despicable?
Or maybe all of the above?
HomeServe are clearly trying to recoup the £30.6m FCA fine for misselling mentioned above from 73 year old loyal customers.

MKA if I was you I would get out of that contract ASAP- you are not alone-
https://www.theguardian.com/money/2017/jan/07/boiler-cover-insurance-premiums-homeserve-cost

Having read their small print I would be off like a shot it covers them in every eventuality with every excuse under the sun not to maintain your boiler . Their website is oppressive in its disclaimers and no liability given if you cant access it /get malware on it /etc etc etc etc . They just want your money for doing the minimum amount of work & outlay . Not even BG with whom I am with on a maintenance contract has the same level of anti customers regulations .

Inter Partner Assistance SA is a Belgium company which is fully owned by AXA but it looks like it keeps Homeserve-aka- IPA (Belgium) running as a separate company for various reasons.
I have managed to find an employee who states -quote – Homeserve Policies are Emergency policies only .
Somebody else agrees with me –
Unfortunately, their terms and conditions are defined in such a way that 90% of claims can be refused by stating T&C.
Many UK companies use Homeserve and I am sure somebody will come to their defence but Mr/Mrs/Mss ordinary citizen arent being given the facts straight off from their glossy website its in the small print . So dont let me stop anybody using their services just be aware of their T & C,s all that glitters is not gold.
By the way Homeserve USA gets heavily criticised by the American public.
And YES its owned by –
HomeServe USA is the North American arm of HomeServe PLC, a London Stock Exchange listed company in the top 200 UK companies by market capitalization.

Anjum Durrani says:
3 May 2019

I had a recent issue with Homeserve. They didn’t complete the work and the policy had run for 9 months without any call outs. Upon the engineer making excuses, he left my home switching the boiler off completely. I had only called them out to look at the hot water issue I was having as heating system was working just fine. Now I had nothing, just 4 days before Christmas. They wouldn’t come back and repair the boiler under the terms of the policy. Is this a breach of contract. Has anyone experienced anything like this before? What are my rights. No heating or hot water for 4 days.