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Will your home insurance leave you out in the cold?

Written by: Emma Lunn
Homeowners should check whether they have protection for their boiler and heating system before winter sets in.

Only a fifth (21 per cent) of home contents insurance policies and a quarter (24 per cent) of home buildings policies include cover for home emergencies as standard, according to Defaqto.

For those looking to protect their homes this winter, approximately half of all contents and buildings insurance policies currently on the market offer ‘home emergency’ cover as an optional add-on; 176 out of 390 (45 per cent) of contents insurance policies, and 183 out of 371 (49 per cent) of buildings insurance policies.

Another alternative is to purchase a separate standalone home emergency insurance. But before doing so it’s important to understand the difference between boiler breakdown insurance and home emergency insurance.

Boiler breakdown insurance

Boiler breakdown insurance is specifically designed to protect a boiler against the cost of future breakdown. Primarily these products cover the cost of any repairs to a boiler to get it up and running again but not necessarily replace it if it is broken. A large proportion include an annual boiler service.

More than half (54 per cent) of policies available (28 out of 52) will cover costs of at least £500 or more towards a replacement boiler, with 11 policies (21 per cent) offering unlimited cover towards replacement. However, there will be exclusions based on the age and power output of the boiler.

Home emergency cover

Home emergency insurance covers a range of emergencies that affect the home. It is designed to help people who have been hit by an emergency to make their home safe again or reinstate essential services.

It offers more comprehensive cover than boiler breakdown insurance and can provide some peace of mind heading into the winter months when homes are at risks of central heating failure, burst pipes, electrical failure and roof damage caused by extreme weather.

For example, homeowners who find that their home is flooded due to burst pipes or extreme weather conditions, may find that with home emergency insurance they will be covered for alternative accommodation, should their home be under water.

Alternative accommodation

Of those policies currently on the market, 54 per cent provide alternative accommodation for an unlimited number of nights. However, costs covered can be low. One in 10 (11 per cent) of these policies will only provide a total maximum of £100 to £200 towards the cost of alternative accommodation.

Half (49 per cent) will cover a maximum between £250 and £500, with 11 per cent offering £750 to £3,000 towards accommodation costs. Only 1 per cent of policies will cover unlimited costs towards alternative accommodation.

Do you have cover already?

Home emergency insurance is sometimes added on to home contents and buildings insurance and packaged bank accounts, or offered through utility providers, so it is worth checking whether there is already cover in place and checking for any exclusions, before buying a new policy.

It can be bought as a standalone product and there are currently, 104 such policies available in the market place.

Brian Brown, consumer finance expert at Defaqto, said: “As the temperature starts to drop, having hot water and heating becomes a higher priority again. Modern boilers are expensive and the cost of having to replace one can be a nasty shock. If you don’t have the funds to pay for this, then a boiler breakdown policy that includes boiler replacement could be a good option for you.

“Homeowners looking for a more comprehensive cover may find a home emergency policy provides greater comfort. However the extent of cover can be limited. So it’s always worth checking the market to find a policy that’s right for your circumstances.”

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