HOUSEHOLDERS had some good news last week when Scottish & Southern Energy said it was "optimistic" that energy prices will fall in 2009. Experts predict that the reduction in the price of wholesale gas means that other energy providers including Bri
tish Gas will follow suit.
But, as well as seeking out the cheapest energy deal, Scots also need to think about what they would do if their boiler or heating system packed up. Would the repairs be affordable or is an insurance policy the answer?
One in three boilers breaks down within six years of being installed and repair bills set people back an average of £470. Heating or boiler cover can protect consumers from having to fork out for labour and parts in the event of a problem – the cost is covered under an insurance policy instead.
Typically this type of insurance is sold by energy providers such as nPower or British Gas, insurers such as Norwich Union or Domestic & General and specialists such as Homeserve or Homecall+.
Ann Robinson, director of consumer policy at uSwitch.com, says: "With household budgets stretched tight it's very tempting to try to make a quick saving by not bothering to cover things like your boiler. Unfortunately, if your boiler packs up this small saving could end up costing you dear."
Simple boiler-only cover starts from as little at £6.29 per month if you opt for npower's Easy Pay Gas Boiler insurance. More comprehensive cover typically costs a bit more but prices vary according to your postcode and your home's specific boiler system.
The most expensive plans will cover your entire heating system, including radiators and pipes, and some include an annual safety check or service for your boiler. Some policies cover plumbing and electrics too.
Jon Ingram, director at boilerchoices.co.uk, a website that compares boiler insurance policies, says it's important to look at the features you require from a policy and then compare the market to ensure that you get the best deal possible.
He says: "Things you should consider are whether you want boiler-only cover or cover for your central heating system and plumbing; whether you want the peace of mind of unlimited call-outs and no excess on repairs; or, if your boiler is relatively new and unlikely to break down, do you need cover at the present time or could you put some money away each month to cover an emergency and gain some interest if it doesn't fail."
Homecall+ offers a choice of boiler cover policies including its Evergreen policy, which covers breakdown of both gas and electric heating systems for £99 a year. The policy also includes an annual boiler inspection – in itself worth about £50.
"In the aftermath of the credit crunch, being without emergency insurance and regular boiler service to maximise fuel efficiency really is a no-brainer," says Homecall+ managing director John Williams.
Homecall's Evergreen policy will pay out for the repair of central heating and hot water system breakdown up to a cost of £500 or, if the boiler is beyond economical repair, £500 towards the cost of a new one.
The policy isn't alone in having a financial limit on how much work is covered per year. Domestic & General's HeatGuard Silver Plan Plus, which costs £132, covers up to £1,500 of work a year and EDF Energy's Gas Central Heating Cover at £191 will also do repairs up to £1,500. Policies with unlimited cover include HomeServe, CoverHeat and British Gas's HomeCare policies.
Before buying boiler or heating cover check your make and age of boiler is covered. Most plans exclude models that are more than 15 years old, and those older than seven years might have to undergo an inspection before the policy starts.
Consumer group Which? suggests that rather than taking out a separate policy you first check whether boiler breakdowns are already covered as part of your house insurance. If not, find out if you can add it as an extra for a small additional premium.
Bradford & Bingley, Budget, Legal & General and Yorkshire Building Society include this as standard while other insurers offer this as an optional extra for between £12 and £60 a year.
However, although this works out considerably cheaper than separate cover, the policy might not be as extensive.
If you decide you really can do without this type of insurance make sure you can afford emergency call-out fees should the worst happen. According to boilerchoices.co.uk, British Gas charges a set fee of £190 for emergency callouts. One option is for householders to "self insure" by simply saving £20 or so a month into a savings account. The money will be there in an emergency but if nothing goes wrong you get to keep the cash.
Policy that fits the bill for PaulPAUL Spurgeon's insurance saved him hundreds of pounds when his boiler broke down, writes Emma Lunn.
Paul, from Aberdeen, bought a new boiler in 2001 and took out an extended warranty for five years. When the warranty finished in 2006 he purchased Annual Safeguard boiler insurance for £85 a year through 50 Plus Insurance, an insurer underwritten by Norwich Union.
In May the boiler broke down and he needed a new heat exchanger. The heat exchanger is the component that transfers the heat from the burner to the water in the system.
Paul says: "I first knew something was wrong when the carpet in the utility room was wet because the boiler was leaking. Somebody came to look at it the next day and said it was the heat exchanger."
He was sent a bill for £723.70, which he paid, and was then immediately reimbursed by Annual Safeguard, minus a £20 excess.
However, the firm that fitted the heat exchanger then realised they had charged him for a plate heat exchanger and not the main heat exchanger – which is more expensive. He received another invoice for £786.31 which Annual Safeguard paid.
"That kind of bill could be a problem for a lot of people," he said. "I was very pleased with the service from the insurance firm."
The full article contains 1048 words and appears in Scotland On Sunday newspaper.
