Thursday 6 December 2018

Is boiler cover worth it?

The temperature has dropped these past few weeks so I’m sure by now you’ll have re-familiarised yourselves with your heating system. Nowadays these are mostly powered by a complex-looking box called a ‘boiler’. Chatting with my gas engineers I know how busy they are at this time of year as heating systems that have gone unused throughout the summer cough and choke back into life.

Modern boilers will typically be in use all year round to provide hot water, so hopefully you haven’t had a nasty surprise when turning it back on. But the valve that switches between heating and hot water can often fail at this time of year when they’re asked to switch over for the first time in months. You also find some radiators simply refuse to work, often due to a stuck TRV. These are just a couple of reasons why it’s sensible to run the heating once a month or so, even at the height of summer.

With nil-excess boiler cover costing just £20 per month from that well-known British provider, surely it must be worth taking it out to avoid the cost of all these potential breakdowns?

Well, I’ve run the numbers on my own portfolio and for the properties I manage on behalf of other landlords and fewer than 10% of properties had repair costs in excess of £240 in the past 12 months. Of those, all but one cost less than £300 to repair, with the most problematic boiler having two separate faults in the year, with a total repair bill of £378.

Unfortunately, I know the pain of having a boiler become uneconomical to repair and having to fork out for a complete replacement (easily costing 10 years of insurance premiums). Indeed, I remember one particular boiler of mine that had three separate faults within the same year - with a total repair bill of £720!

Some independent research suggested that 49% of boilers develop a fault within their first six years, costing an average of £188 to repair, whilst 67% of those with breakdown cover did not need a repair visit at all.

Of course, like all insurance policies, overall the company makes money from the group as a whole. But some will take comfort that by paying a manageable monthly fee they may prevent a larger unexpected bill.

It seems to me that if you are on a tight budget, have an older boiler or just don’t want the hassle of phoning around for plumbers, then boiler cover might be worth the cost; just be sure to check the policy for limits and exceptions so you don’t have a nasty surprise in the event of a breakdown that isn’t fully covered. Having cover in place would certainly help me not having to make uneasy calls to landlords with the news of a large repair bill!

(This article was featured in the Chichester Observer's property section on December 06, 2018)

Clive Janes, CRJ Lettings

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