Thursday, 12 December 2019

Is it worth buying boiler insurance?

The cold season is upon us and in an effort to keep warm many of us will have turned to a plain looking metal box called a ‘boiler’. When the heating was turned on for the first time it may have been off for months - so did yours work perfectly first time or was it coughing back to life?

Nowadays, many boilers are used all year round to provide hot water so you shouldn't encounter any nasty surprises when turning the heating on too. Still, the fact they’ll ‘just work’ is often taken for granted and these mysterious contraptions do have a habit of breaking down just as you need them most. And a broken boiler can be an expensive fix, landing you with a nasty bill to pay. So, to avoid a dent in your savings, is it best to buy boiler insurance instead?

Many opt not to buy boiler insurance as it becomes yet another monthly expense that seems unnecessary (until it’s needed!). However, each household is different and you should assess whether it makes sense for your own financial circumstances and peace of mind to set aside a fixed smaller amount each month versus the potential of facing a large one-off payment out of the blue.

Quickly browsing some boiler insurance policies online, I found that for £15 per month you can have unlimited repairs, with no excess to pay. Whilst this would equate to £180 per year down the drain if it wasn’t used, most boiler repairs will cost at least that much to resolve; one boiler I had broke down three times with three different faults in a 12 month period, costing a total of £720 to fix (that’s four years’ worth of boiler insurance payments!).

Looking through my records though, only 9% of boilers had repair bills above £180 in any one year; meaning boiler insurance would have been an unnecessary expense in most cases, which I guess is how insurance companies make their money!

Some households may be more susceptible to a breakdown, such as larger families with multiple users using hot water for showering/bathing and with more radiators in the house demanding heating from the one boiler. The boiler’s age may also help determine the likelihood it’ll breakdown; although many insurers stipulate a maximum age for boilers they’ll cover as they know this too!

If you do decide boiler insurance makes sense, you should first check to see if your home insurance covers it or whether it could be added as an extra. Alternatively, there are specialist providers, but whoever you use always be sure to understand what the policy actually covers.

Taking all of this into consideration, it seems to me that if you're on a tight budget, have an older boiler or don't want the hassle of phoning around for plumbers, then boiler insurance might be worthwhile. Having it would certainly help me avoid uneasy calls to landlords with the news of a large repair bill!

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