Complaints by the bucket-load as boiler insurance firm runs for cover

Published 27th Apr 2009

CoverHeat has left its angry customers to cope with leaking systems and holding worthless policies.


CoverHeat, a gas boiler insurance company, has ceased trading and departed its south coast base leaving a trail of unpaid claims and thousands of unhappy customers.

The company, which Guardian Money first warned against using in January, was already being investigated by trading­ standards officers. It emerged this week that the operators of the business park in which it was based have confirmed it left the premises in "January or February".

Worryingly, it was still accepting new payments via intermediary firm, Netbanx. And its website was up and running this week, although there is no one answering the phone or accepting­ mail.

Its apparent collapse leaves thousands of customers holding worthless policies, and facing having to claim their cost back from their credit card provider. Many who paid by debit card will have lost their money.

CoverHeat was set up in 2006 to offer an alternative to British Gas's homecare boiler insurance. Its policies cost £150 a year and aimed to cover emergency repairs and call-outs by a qualified plumber if the boiler, or any other part of the central heating system­ broke down. The price included an annual­ ­­­service, and was the cheapest in the market. Thousands of consumers are thought to have bought policies online.

However, the company appears to have run into difficulties last year. Customers initially complained of its shambolic administration. It later became­ more and more difficult to get a plumber to visit as promised. Guardian Money received scores of emails from unhappy customers – many were left for several weeks over the coldest part of the winter without heat or hot water.

We were contacted this week by a reader who said his letters of complaint, sent by recorded delivery, were returned by Royal Mail as undelivered.

A terse-sounding woman at its business park base in Shoreham-by-Sea, West Sussex, revealed this week that its staff had left several weeks earlier. She said she had no idea where they were. No forwarding address had been left. One customer, who was let down, was 48-year-old Londoner, Hor Chan. His boiler started leaking just before Christmas, and he was having to get up every three hours during the night to empty containers catching the water.

Despite repeated phone calls, the company left him and his fiancee without heating in their Twickenham flat over Christmas and New Year after informing him that the part its engineer had allegedly damaged during the service "wasn't covered by the policy". He was forced to get another plumber to fix the problem and had filed a claim with the small claims court to get his money back – a claim that now looks unlikely to be paid.

Jill McIntosh, from Edinburgh, also contacted Guardian Money. "I'm one of the many who are beyond belief at how utterly useless this company is. I, too, had a perfectly good working boiler that mysteriously started to leak within days of CoverHeat sending an engineer to 'service' it. I've since spent 12 months of total aggravation trying to get them to fix it. Needless to say, I still have a bucket under my boiler collecting the dripping water.

"They now have the audacity to ask me to pay another £150, as my policy has just expired, despite them being aware that a new seal has been required­ for months."

A spokesman for Netbanx, which provided card payments services for the firm, says: "Our relationship with CoverHeat was already under review. As a result, we are is no longer processes­ payments."

This means that the setting up and processing of direct debit mandates and credit cards payments will not be undertaken via the Netbanx payment gateway.

CoverHeat's managing director, Clive Solly, is also a director of a firm called Mechanika Engineering Recruitment. Mechanika's phone number was unobtainable this week. Our attempts to contact Solly, or any staff connected with CoverHeat, have met with no response.­
What to do now

If you bought a CoverHeat policy or have an outstanding claim, contact your credit card provider. The sale of goods act makes the card provider jointly liable for the service – although customers may have to wait for the firm to be officially wound up before they get their refund. If you paid by Visa debit card you may also get your money back.

Those who paid by other debit cards have probably lost their money. When buying anything like this on the web, it's vital to always pay by credit, rather than debit, card in case of just this eventuality.

Source: ' Guardian '

View All Latest Articles