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Should I spend out on landlord boiler cover insurance? This has been a question that has preoccupied many landlords for many years. By instinct no one likes shelling money out and not getting anything back in return. However, when things do go wrong, we suddenly remember what an expensive business boilers and employing plumbers can be. The other issue for landlords to remember is that it is not just the cost of employing a plumber, especially a London plumber, it’s also getting hold of one.
Consumer organisation Which has recently looked at how long a boiler will go without needing some kind of repair. The answer. Within the first six years 49% of boilers developed a fault of some description and the average cost of repairing a boiler fault was £188. The most common faults on a boiler during the early years based on a recent Which survey of almost 5,000 members were:
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. Conditions and restrictions for each contract vary so it’s important to look at the details. The typical restriction is boiler insurance may not be available if your boiler is over a certain age so for a conventional boiler this may be 15 years but only 7 years for a condensing boiler. Other policies specifically exclude cover in certain types of building such as apartments in a block so it’s worth thumbing through the small print.
Many of the landlord boiler insurance companies will bundle their cover to include additional services such as a gas safety report. They also promise to replace the boiler if they are unable to fix the boiler or find the part.
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.
Latest statistics indicate that overwhelmingly people opt for boiler insurance to give them peace of mind (63%). Some will opt for it because of the fact it includes an annual service (55%). Interestingly, 67% of those who have breakdown cover did not need a repair visit outside of the annual service. This means they could be paying for an overpriced service. Should a landlord buy boiler insurance?
For many landlords one of the hardest problems in resolving boiler and plumbing problems is actually getting the plumber to the buy-to-let property in the first place. With freezing weather, plumbers start to get inundated with burst pipes and other emergencies that mean even when a landlord has made careful arrangements, these may have to be cancelled at the last minute because another customers ceiling is just about to collapse under a weight of water. All ‘lordable stuff’ but when your tenant hasn’t had heating or hot water for several days; then rightly the tenant doesn’t care about the noble actions of your plumber – they want and expect their heating to be fixed. This is where the insurance schemes do offer something useful. Homeserve offer 24/7 coverage 365 days a year and say that they can get somebody to you in 2 hours in a real emergency. This is a relief especially when unfortunately boilers and leaks don’t seem to differentiate between holidays and other days when deciding to break down.
Statistically, landlords maybe better off without boiler insurance according to a recent Which survey. In fact, 93% of those without cover would be at least £50 better off than even with the cheapest cover. However, the unlucky ones mean that 3% of landlords would be £100 better off paying for insurance. If a landlord has an older or unreliable boiler then landlords may be better off with a policy even though 82% will be at least £50 better off statistically. As always, these figures don’t factor in the worry or inconvenience factor of having to sort out and organise the repairs.
Research carried out by Which found it’s usually cheaper to use a heating engineer to carry out repairs to a landlord’s 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, on the weekend emergency plumbers may charge you an hourly day rate starting at £170 per hour.
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 will get landed with a couple of cracking bills and the worry that they will have to fork out again if problems arise in the future.
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 who is self employed then they 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.
Other factors to consider, most boiler covers will be able to arrange an engineer’s visit for you but in most cases they will give you an all-day appointment – from 8am till 6pm, for example – meaning that it will have to be either you or your tenant who will have to take time off work and wait for an engineer to arrive. In most cases, tenants will not be happy to do this, so again, this will be your grief to deal with. Nowadays tenants expect a hassle-free tenancy, they expect to live in a property where everything works and when thing do go wrong, they want the contractors to be able to pick up keys, attend the property and repair the issue.
There is another way, why not have your property managed by a professional? That way never have to face the need to deal with broken boilers or leaks on a weekend, never have a problem of needing to find a contractor, never have to wait in for a plumber to arrive. Sounds like a dream? If it does, then maybe it is time to give your local agent a call and have them tell you everything about their professional property management service.
Miss. Claire White
W. Why Media
E. claire@whymedia.com