This rip-off preys on your fears

This massive rip-off preys on your fears that, unless you fork out hundreds of pounds, you will freeze to death this Christmas! Don't get sucked in - find out how to avoid this rip-off!

It's everyone's nightmare: it's Christmas Eve and the weather is horrific - plummeting temperatures and high winds. You've got guests arriving tonight to share Christmas Day with you, and suddenly the boiler breaks down, just before the electricity supply cuts out.

You've got no central heating, no electricity, and the only thing your guests have got to look forward to is the prospect of sitting in a freezing house while you try to find something other than raw turkey to serve for Christmas lunch.

Ok, so this tale might sound a little far-fetched, but it is possible. And the idea of a boiler breakdown and loss of heating during the winter months can be a big worry for many of us - which is why the idea of paying out for boiler breakdown and heating cover can be tempting.

But, in my opinion, boiler insurance is a rip-off.

The cost of boiler insurance

Typically, boiler insurance costs between £100 to £200 per year, depending on how much cover you want.

The cheapest policies will only cover you for the boiler itself and the controls. Bear in mind, though, you are likely to have to pay a call-out fee of around £50 on top of this. What's more, the cheapest policies are unlikely to include an annual service - so this could cost you an additional £60 to £70 per year.

If you want a more comprehensive policy, the price you pay will be at the higher end of the scale, but it should cover your heating system as well as include an annual boiler service. It may even include plumbing and drains, but this is likely to take you over the £200 per year mark.

So it's a pricey service!

Shop around

If you are considering taking out boiler cover, don't feel you have to take out a policy with your current energy provider. As with all financial products, it's well worth doing your own research and shopping around to make sure you're getting the best deal for your money.

As you shop around, make sure you read the terms and conditions of the policy carefully. Several boiler cover policies will have a cap on how many claims you can make in a year and some will only pay for costs up to a certain level per claim.

It's also worth noting that most cover plans have a 30 day no claims period. This is to prevent people from signing up for cover on the day their boiler breaks down. So if you're only thinking about getting cover now, it's not going to help you much over the Christmas period.

Finally, most boiler cover plans exclude models that are over 15 years old, and you may find that if your boiler is older than seven years, it will have to undergo an inspection before being covered. Even if you are covered, boiler overs seven years old that break down beyond repair are unlikely to be eligible for a replacement from the boiler insurer. So beyond this point, you're only covered for repairs - but you'll probably still be charged the same as you were before!

Home emergency cover

As you can probably tell, I'm not terribly keen on boiler cover. However, there is another option - and one that, in my opinion, offers much better value for money. And that's something called Home Emergency Cover. With this type of insurance, you can usually get between £500 and £750 of cover for repairs and labour and up to £100 for temporary accommodation.

Typically, home emergency cover will include the following:

Boiler breakdown or heating failure
Unexpected roofing problems such as leaks or tiles blown off in a storm
Blockages in toilet waste pipes
Plumbing problems related to leaking pipes, blocked drains, water tanks or leaking radiators
Failure of gas or electricity
Failure of the hot water system
Loss of keys needed to get into your home
Broken or damaged windows/doors that pose a security risk
Any other unforeseen or sudden circumstance which would mean your home would be inhabitable or exposes you to a health or security risk.

So it will cover you for far more than boiler cover will. That said, one drawback is that it won't include your annual boiler service - but then, as I mentioned earlier, your standard boiler cover might not include this anyway.

The other disadvantage is that it won't cover the cost of replacing your boiler if it is beyond repair - many boiler cover policies, on the other hand, will include this as part of the deal, although usually only for boilers less than seven years old.

On the plus side, home emergency cover is much cheaper than boiler cover and will cost you around £80 to £100 a year. What's more, if you add home emergency cover to your home insurance policy it can work out to be even cheaper - typically, around £4 or £5 per month (so around £50 to £60 a year).

To take it or not to take it

Whether or not you opt to take out cover is entirely up to you. But it's worth noting that if you've recently had a new boiler installed, the parts and installation might already be covered by the manufacturer's warranty for between one and three years. If this is the case, additional boiler cover could simply be a waste of money - at least until your warranty expires.

However, if your boiler is less than seven years old and you want the reassurance that it will be replaced if necessary, boiler cover is probably your only option.

Otherwise I think you're better off choosing home emergency cover and ensuring you have your boiler serviced every year. That way you'll have peace of mind over the winter months.

Of course, you could simply put any spare cash you have into a savings account - that way, you'll have funds to fall back on should your boiler break down and you need to get it fixed. The money should also come in handy for your annual boiler service. And of course, if you're lucky enough not to have a boiler breakdown, you won't have lost any money!

Finally, it's worth noting that if you rent your home, you don't need to take out boiler cover as it's your landlord's responsibility to ensure your central heating system is functioning correctly.

Get help from lovemoney.com

If you fancy cutting how much you shell out each month on household bills, lovemoney.com can help.

First, adopt this goal: Lower your household bills

Next, watch this video on energy tariffs

Then, if you have any questions or queries about nifty ways to cut your energy spend, why not pick the brains of your fellow lovemoney.com readers in our Q&A section?

More: Don't get ripped off by your energy provider | Protect your home from costly winter crises