Is Landlords Boiler insurance worth it?

Getting your boiler fixed can be costly for landlords. Anywhere from a minimum £60 call out fee to £350 if a landlords heat exchanger needs replacing. That is if a landlord can get someone out to fix it at all. If not a landlord's tenants could be without hot water and heating for an unacceptably long time.

Reliability data gathered by Which in 2006 found nearly one in three boilers up to six years old breaks down. This is high compared to most domestic appliances.

My recent experiences of boilers

I’ve had a situation recently where two boilers were playing up. As is the case with many mechanical devices; boilers rarely break straight off. There is normally an annoying catalogue of minor intermittent faults, before the final phone call from the tenant announcing that:

“Nothing at all works now!”

This is when a landlord starts anxiously flicking through their phone or contact book looking for the details of their plumber and praying that they haven’t changed phones, or died as happened to me once. The next stage is the pleading; as the landlord attempts to advance a convincing argument of why their tenant’s needs are greater than anybody elses, in the hope that they can get the job higher up the priority list.

The other unenviable alternative is to go on the hunt for a competent heating engineer by trawling the yellow pages or the internet.

My recent experiences with heating engineers have been decidedly mixed. I endured an incompetent, but apparently qualified plumber over several months who spectacularly failed to fix the temporary problems I was having with my boilers. The result was I ended up having to call out the manufacturers engineer, from Worcester Bosch, to try and remedy the, by this stage, desperate situation. All this was not cheap, £185 for the Worcester Bosh engineer; this was after I had already shelled out for a new PCB.

All this hassle got me to thinking whether I should reconsider boiler insurance and take a leaf out of expert student landlord book Terry Samuels AKA Bee In The Bonnet who has been using insurance for years.

What is boiler insurance or a boiler service contract?

Boiler insurance or a boiler servicing contract is a policy which involves monthly or annual payment that guarantees the costs of repair should the boiler break under cover. There are a number of companies that now provide this specialist cover for landlords and in a follow up article next week I’ll look at the providers, the costs, the pitfalls and the best buys. Conditions and restrictions for each contract vary so it’s important to look at the details.

When should a landlord get boiler insurance?

There are two essential factors when deciding whether to get boiler insurance. Firstly the costs of repairing their boiler should it go wrong and secondly the hassle / convenience of trying to locate and employ an engineer to fix the problem.

What are typical boiler repair costs?

Repairing boilers ain’t cheap. I know this having shelled out over £500 in recent weeks on the repair of two relatively new boilers (less than 5 years old). Landlords should look at the blog for a list of common boiler costs for landlords.

Reliability data gathered by Which in 2006 found nearly one in three boilers up to six years old breaks down. This is high compared to most domestic appliances. Their survey of nearly 1,300 Which members with boiler insurance, found 70% have had at least one emergency repair and of those, nearly a quarter have had more than five repairs.

The true cost of boiler breakdown for a landlord

Research carried out by Which found it’s usually cheaper to use a heating engineer to carry out repairs to a landlords boiler when needed, rather than buy a breakdown contract. Over three years it costs, on average, less than half as much. Where a landlord doesn’t have a regular, reliable and cheap plumber, finding one that isn’t going to rip you off isn’t easy. Emergency plumbing rates and call out charges will quickly rack up a large bill and that is before any parts have been purchased. For example the PCB board I had to purchase to fix one of my boilers was over £150. For those in London a quick check on Pimlico Plumbers weekend rates for heating services showed an hourly day rate of £130.

The cheapest breakdown cover available to a landlord they found from the major providers was £108 a year, or £324 over three years. This compares to landlords who didn’t have a contract but had to have repairs done paid £150 over three years, on average. In simple terms, the Which research concluded that; getting repairs done when needed saved at least £58 a year.

Their research also showed that over one in 10 individuals without cover spent more than £324 – the cost of our cheapest contract – over three years. This means that to a degree it’s a matter of luck. Some landlords will be lucky and avoid large costs; others like me recently will get landed with a couple of cracking bills and the worry that I will have to fork out again if problems arise in the future.

Factoring the cost of a landlords time commitments

The other crucial consideration for a landlord is time.

Finding a competent heating engineer isn’t always easy, especially over busy times or if a landlord has little experience of dealing with plumbers and central heating systems.

In deciding whether to take out a policy a landlord should consider what their time commitments are. For instance for somebody like myself who is self employed then I have the flexibility of being able to phone round and arrange a heating engineer. For those landlords who do not have this luxury, insurance offers the benefit of being able to guarantee access to an engineer at any time. Likewise if you are a landlord with a an older boiler, who is on a tight budget, then having the certainty that you are not going to be hit with a repair bill of £200-300 is an attractive reason to take out cover.

 

British Gas

 

Taken from Property Hawk

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