Homecare insurance: Is it really worth it?

By MoneyhighStreet Staff. Published on September 19, 2007 This post currently has no comments.

Gas Man

Home emergency insurance plans can provide a valuable service for homeowners, offering quick and efficient repairs for all kinds of household problems. But with annual costs ranging from about £350 to £500 for more comprehensive plans, are they really worth it?

Home emergency insurance provides peace of mind for millions of homeowners in Britain, guaranteeing repairs to household problems such as broken heating systems, plumbing problems and electrical problems at no extra cost.

All repairs are carried out by certified professionals and there is usually no limit to the number of call outs.

The home emergency insurance plans available in the United Kingdom market today range from the very basic, which only cover repairs to your boiler, to the very comprehensive, which usually cover heating systems, electrics, plumbing and drainage, and appliances.

However, this kind of insurance is seen by many as an expensive luxury and with recent rises in the cost of British Gas' maintenance and homecare cover there is serious doubt whether these plans are really worth it.

Last year, new British Gas customers paid between £12 and £23 per month for home maintenance plans, depending on the level of cover. This year, this has risen to between £13 and £26.

The cheapest plan, Homecare 100, covers your boiler and controls. Homecare 200, costing £17 per month, covers your entire heating system. If you want your plumbing and draining covered as well, you can opt for Homecare 300 for £22 per month. The most comprehensive plan, Homecare 400, covers all of the above and electrics for £26 per month.

However, bear in mind that these prices are for new customers and prices will go up after the first year.

British Gas' home care plans remain the most popular in the United Kingdom with over four million customers. However, Direct Line offers a rival service that provides similar flexible cover that is also popular with consumers.

Price wise, there is little difference between the two competitors. Existing home, car or breakdown insurance cover customers with Direct Line can benefit from a 15% discount for the first year.

Both offer unlimited callouts. Direct Line's most comprehensive plan, Total Response, offers the added benefit of cover for external locks, doors and windows, while Homecare 400 offers a yearly gas appliance check.

With annual premiums for comprehensive plans costing at least £312 a year, home care plans may not be for everyone. Consumer review websites suggest that they are worthwhile if you are living in an older property where you are more likely to have problems with heating, plumbing and electrics. If you live in a newly built home with a modern heating system, it is probably more economical to pay for problems as they arise.

Another possible alternative is British Gas' Homecare Flexi product. This offers reduced monthly charges, but you will have to pay a £50 charge for every callout. Prices range from £9 for the Homecare 100 plan to £17 for the Homecare 400 plan.

This is a good option if you want the peace of mind of having home care insurance, but you do not expect many problems in your home. Again, we would only recommend this if you live in a new home, or if your heating, plumbing and electrical systems are in a very good state of repair. For comprehensive plan customers, anything more than two callouts in a year would see them lose money.

If you are considering purchasing homecare insurance, you should first consider how many repairs you needed in your home in recent years and how much it cost. Compare this to the premium you would pay for your home care insurance for your home and see if it would really save you money.

If you do opt for homecare insurance, be sure to shop around. Here we cover the two most popular services, but others include: Domestic & General, HomeCall+, HomeServe, MRL Insurance Direct and Powergen Heat Cover.

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