This has been a year of crises for many in the United Kingdom, with many losing their jobs, losing their lives or having their pay frozen. The last one isn’t comparable. Many, on both sides, will be looking at the obligations of their insurance policies very closely.
Across the world Lloyd’s of London, the world’s largest insurance exchange estimates the insurance industry will suffer around £167 billion in losses from the coronavirus pandemic this year.
Lloyd’s estimates that it will payout in the range of £2.5 billion to £3.5 billion to global customers, comparable in scale to the equally unprecedented Sept. 11 attacks of 2001.
According to 2013 research for mortgage and loans broker Ocean Finance seven million homeowners said their home is in need of some repairs but with money still tight for many people across stagnant UK, more than half said they couldn’t afford the necessary repair work. One of the more expensive, Boiler repairs, mercifully did not rank in the list of most common household repairs which includes the following:
Repairs needed %
- Fences/boundaries need repairing 32%
- Outside of the house needs painting 30%
- Exterior windows need painting/repairing 27%
- Damp or mould 26%
- Areas need re-plastering 26%
- Blocked gutters need cleaning/repairing 26%
- Overgrown garden 23%
In this article we look at one of those not covered in this list – though often just as common – and some of the insurance policies that go along with them.
Contract: what are you protected for?
- You should only accept a boiler in your home or place of work if it complies with equivalent European Community member or international standards in relation to safety, suitability and fitness for purpose. The overwhelming majority do!
- The quantity, quality and description of the Goods or Services should comply in all respects with any quoted British Standards and the specification or illustration contained in any product pamphlet or other sales or marketing literature of the Contractor or drawings, samples and patterns specified in the Agreement or any modifications thereof that may be agreed by the Council in Writing.
- All Goods should be of ‘good construction, sound materials, and of adequate strength’, and should ‘be free of defects in design materials and workmanship’, and shall comply with the requirements of the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982, as applicable to your Agreement and as amended by any related statutes, and any statutory re-enactment(s) or modification(s) thereof.
- Most warranties commence from the date of installation for a minimum period of 12
months for the Goods and all their component parts, so that, where applicable, they are free from any defects in design, workmanship, construction or materials. Certain Goods carry warranties for longer periods – check!
- Although you’re protected by consumer case law, you always request a receipt and a contract with the installation of your new boiler, setting out in full the clauses which you and your installation are bound by.
Boiler Insurance: What You Need to Know
The image of the central heating failing in the year’s colder months is often enough to compel homeowners into taking out boiler insurance. In 2016, ten million homeowners spent year spent a combined £1billion on such cover to fix broken boilers, repair burst water pipes or kick-start the central heating.
Prices of monthly cover vary. Some say that those who do can spend more on the cover than they would have done if they just called a plumber to fix the problem when it arose. It’s worth doing some quick maths.
However, boiler insurance covers the cost of a plumber to come out and fix any problem with your boiler, at any time of day or night. It includes the cost of replacing broken or worn out parts. Some also include replacing the boiler if it cannot be repaired – and an annual inspection.
The insurance is sold as standalone boiler breakdown cover or offered as part of a more comprehensive package that covers other central heating problems, for example, broken radiators or leaky pipes. It is separate from home insurance that will not include the cost of your central heating boiler system as standard. Which? says the typical cost of an annual boiler service is £70 while insurance that includes an annual inspection is £245.
Many heating systems are already covered under a manufacturer’s warranty, a tradesman guarantee or a home insurance policy. Check with your home insurance provider first to see if it already covers repairs to your boiler.
Even if it does not, it is often possible to extend the insurance cover to include the boiler for an additional £50 a year. This will not include the cost of an annual inspection. Boiler insurance prices vary depending on the system you have installed and the level of cover you want. Greater convenience and peace of mind often come for a little extra.
Could you be entitled to a Free Boiler Grant?
As part of the Government’s boiler grant scheme, the biggest energy companies in the United Kingdom are installing replacement boilers at no charge to qualifying homeowners and private tenants.
The Big Six energy companies that are involved in the Eco Scheme are:
- British Gas
- Scottish Power
You must be with one of these companies to be eligible.
The current ECO free boiler grant scheme is due to end in March 2022. However, the government has set a budget and homeowners that do not apply for a new boiler soon may soon not be eligible. Known as ECO (Energy Companies Obligation) for low-income households means that you could be entitled to upgrade to a more energy-efficient boiler free of charge, or at the very least, heavily subsidised. Landlords with low income tenants may also be eligible.
Given the average cost of replacing an inefficient gas boiler is around £2,300, it is certainly in your interest to consider applying for a free boiler grant. Other households may also be entitled to benefits that are designed to help families minimise the rising costs of heating bills. These include:
- Heating controls
- Loft insulation
- Solid wall insulation
- Cavity wall insulation
We explain everything you need to know about qualifying for a free boiler grant and who you should speak to if you are eligible to have a free replacement boiler installed.
Under the Energy Companies Obligations (ECO) agreement, energy companies are obliged to provide UK homeowners with ‘primary measures’ to use less energy.
|ECO SCHEME||WHAT CAN YOU GET|
|HOME HEATING COST REDUCTION (HHCRO)||This scheme is designed to help households to heat their homes for less. Solutions include installing energy-efficient replacement boilers|
|CARBON EMISSIONS REDUCTION OBLIGATION (CERO)||The scheme includes improving heat retention measures in homes such as roof insulation and connections to heating systems|
The primary obligations set by the government’s free boiler scheme are to minimise our combined carbon use and tackle fuel poverty. In order to reach its targets, energy suppliers in the UK have been required to help minimise fuel consumption and reduce household energy bills by paying for A-rated boilers to be installed in qualifying households.
Leading boiler manufacturers including Baxi and Gloworm have been working on designing energy efficient boilers. Old boilers lose around two-fifths of the heat they generate. This means that for every £1 of heating you use, 40p literally goes up in steam. The new A-rated energy efficiency boilers save around 90% of the heat they generate potentially saving hundreds of pounds every year.
The next stage is to encourage UK homeowners to install energy efficient gas boilers. It is expected that approximately 250,000 households in the UK will qualify for a free boiler grant.
However, the government aims to support in total over 1 million homeowners. Thousands of households that considered ‘vulnerable’ by inclusion criteria may also have recourse to subsidies, and any contributions that may have to be paid will be small.
Householders that are eligible for free boiler grants have no obligation to pay back instalments. Furthermore, there are no complicated terms and conditions to be met other than the basic qualifying criteria.
Households that qualify for a free boiler grant will be entitled to install a new gas boiler together with heating controls where necessary. An energy assessment will also be carried out free of charge.
The funding entitlement to will be contingent upon on income, the energy efficiency of the home and the age of the existing boiler.
Applicants under the boiler replacement scheme must satisfy the following criteria:
- Own your home
- Private tenants must have permission from the landlord
- Receive a combination of government benefits (see below)
- The existing boiler must be more than 5-years old
- The property must have a gas supply
Applicants must receive a combination of the following Government benefits.
- Child tax credits
- Working tax credits
- Income-related ESA
- Income-related JSA
- Income support
- Universal tax credits
- Pension credits
Applicants who receive pension credits and child tax credits in which the annual household income is less than £16,010 automatically qualify for a replacement boiler grant. Any welfare recipients in the left-hand column must also receive at least one from the right-hand column:
|Income-related ESA Income-related JSA Income Support||• Disability Living Allowance • Pension Premium • Employment Support • Child under 16 • Child under 20 (not in higher education)|
|Working Tax Credits (household income below £16,010)||• Over 60 years old • Disabled worker allowance • Severe disability benefit • Child under 16 • Child under 20 (not in higher education)|
|Universal Credit (Monthly take-home pay of £1250 or less within the last 12-months||• Child under 16 • Child under 20 (not in higher education) • Disability Living Allowance • Personal Independent Payment • Limited capability for work|
Because of funding limitations in relation to the Scheme, some households may be asked make a contribution towards the cost of installing a new gas boiler. Applicants in receipt of child tax credits, working tax credits and universal credits are subject to household income thresholds.
Threshold calculations for inclusion (or exclusion) are made in relation to the number of adults and children living in your home, together with the number of bedrooms. The scheme also indicates homeowners should have a new gas boiler installed if the existing boiler is broken and more than five years old. However, if the boiler is less than five year’s old, the free boiler replacement scheme makes the assumption that it will usually be more cost-effective to repair the boiler than to replace it.
Landlords may be able to get a free boiler if they have tenants who meet inclusion criteria. As the legal homeowners it would technically be a free home improvement for them though this is, of course, not the objective of the scheme.
Eco Scheme for Council Houses
UK residents living in social housing may also qualify for a free replacement boiler and an insulation grant. Householders in council houses or housing association properties do not have to be in receipt of the state benefits listed above. However, the building must have an Energy Performance Certificate (EPC) rating of E, F, or G in order to be eligible for an insulation grant. You can find your home efficiency rating on the energy performance certificate register.
You may also be eligible for a free boiler grant, but only where the property has not previously had a central heating system. Moreover, only properties that are owned entirely by the housing association will qualify for a free boiler grant. Shared ownership properties are ineligible under the boiler grant scheme.
Pensioners may be eligible for a Free Boiler Replacement
A-rated boilers can cost upwards of £700 and anywhere up to £4,000 depending on the model of the boiler. It is one of the intentions of the ECO scheme to help pensioners upgrade their homes with energy efficient boilers. If you are aged over 60 and receive Pension Credit you may be entitled to a free replacement boiler.
Pensioners in receipt of a standard state pension do not qualify for a free boiler grant. However, if you are aged over 60 and claim working tax credits, you may still be eligible for assistance under the boiler grant scheme.
Speak to your supplier or landlord today.