Boiler insurers 'failing customers,' says watchdog

Published 18th Feb 2010

Insurance companies are failing to organise repairs or pay enough for the distress and inconvenience of a broken boiler


Insurance companies that provide cover in the event of a boiler breaking down are frequently failing to take swift action, leaving householders without heating for weeks on end in some cases and inadequately compensating them in others, according to the Financial Ombudsman Service (FOS).

The FOS published its insight into recent insurance complaints was published today, and said it has seen a "significant number" of claims involving domestic and plumbing and heating emergencies.

"While many insurers respond promptly and sympathetically to claims involving domestic emergencies, the cases we see suggest that some insurers fail to appreciate the extent to which delays on their part can create real difficulties for consumers."

In a number of the cases it cited, it ruled that insurance companies were not paying out enough for the distress and inconvenience caused by a broken down boiler.

In one case, a boiler belonging to "Mr and Mrs M" broke down three days before Christmas. It was covered by breakdown protection insurance and the boiler was repaired the next day, but broke down again on Christmas Day. The engineers contracted by the insurer could not come out for days and so the couple were given permission by the insurer to employ their own independent contractors. At the same time they hired portable heaters to try to keep their family guests, including Mr M's elderly father, warm over the Christmas and New Year period.

The insurer then offered £250 to cover the contractors and £120 for "distress and inconvenience." However, the FOS ruled this was not enough and the couple were eventually rewarded an additional payment to cover the hire of the heaters and £250 for distress and inconvenience.

In another case, "Mrs G" and her elderly mother were left for a month without heating or hot water because of the time it took for an engineer to come out and do the work on her broken boiler. Mrs G was awarded £75 as a "good will gesture" for the delays but the ombudsman upped this to £350.

"In any case where somebody is left in a dire situation insurers must look at what is reasonable to expect that person to endure," said a spokesman for the FOS. "Often disputes emerge over additional time and delays above and beyond what is reasonable and also an individual's situation such as whether they are elderly or sick and what impact this can have. In those cases lack of heating can be really significant."

A report by consumer body Which? last year concluded that 90% of households would be better off dumping boiler insurance policies and putting the money into a savings account.

It also found that just 57% of British Gas boiler contract customers were satisfied with the energy giant's customer service, with more than 1,900 responding to the survey. Millions of households with British Gas HomeCare policies were hit with price rises of up to 50% at the end of last year, taking the annual cost of insuring against central heating and plumbing disasters for some customers to £450.

Thousands of households have, meanwhile, recently decided to ditch their ailing old boilers, taking advantage of the government's new boiler scrappage scheme. Earlier this week, the Department of Energy and Climate Change said that of the 125,000 vouchers made available, 54,578 have been taken, leaving about 70,000, which are worth a total of £28m.

But some plumbers have suggested that the scheme could prove to be "financial madness" as it could involve ripping out an inefficient but functioning boiler.

Source: ' Guardian '

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