Heat pump owners face massive bills as one in four home insurance deals don’t cover them

Growing numbers of homeowners swapping gas boilers for heat pumps find their insurance deals don’t cover emergency repairs – leaving many facing bills of thousands of pounds.

The issue surrounds home emergency insurance, which pays for quick fixes to urgent problems such as leaking central heating systems or gas pipes.

But many home emergency policies only cover gas central heating – meaning they exclude electrical alternatives such as heat pumps.

To make matters worse, many home emergency policies are so vague that consumers cannot tell if they are covered for their heat pumps or not. In response, some homeowners have been forced to turn to the Financial Ombudsman Service (FOS) – and won.

Dig in: Ground source heat pumps are the most expensive to fit, and work by converting heat from the earth into electrical power for your home

In addition, the number of heat pumps is growing as homeowners replace their gas boilers with Government Boiler Upgrade Scheme grants, worth up to £6,000 a home. Prime Minister Rishi Sunak yesterday unveiled plans to increase this to £7,500.

Financial data experts Defaqto said 24 per cent of home emergency insurance deals do not cover electrical central heating systems such as heat pumps.

But the true figure is likely to be higher, as the wording of many of these products is woolly, making it hard to tell if heat pumps are covered or not.

Angela Pilley, a home insurance expert at Defaqto, said: ‘It is not currently clear in all policy wordings whether ground source heat pumps are classified under the definition of “electric heating system,” so it certainly should not be assumed that this is the case.

‘If a consumer is looking to change or upgrade their heating system then it is essential that they check with the home emergency provider to see if cover would be in place for these types of heating systems.

‘We are seeing policy wordings develop to more clearly include or exclude these modern heating systems, but as this is not yet the case with all providers, consumers need to double check to be certain.’

Homeowners turning to the ombudsman

In one case, a man with an air source heat pump bought home emergency cover for £49.99 per year.

When his heating and hot water failed, the homeowner, Mr H, claimed on the policy. But when an engineer arrived, he was told the tradesman would not work on electrical heating systems – and his policy would not cover it either.

Mr H’s household included young children and an elderly relative with a heart condition – all facing a Christmas and New Year without heating or hot water.

The homeowner desperately tried to find a spare part to repair his heat pump, but was told there was a five-month wait, leaving him with no choice but to get an entire new boiler fitted, which cost him £9,000.

He then turned to the FOS. The Ombudsman said: ‘It’s our approach – and our approach mirrors the law – that if any term in an insurance contract isn’t clear, it should be interpreted in favour of the policyholder.

‘Based on what I’ve seen so far, I don’t think [the broker] made it clear in Mr H’s policy documents that his air source heat pump wasn’t covered by his executive home emergency insurance policy. And that means I don’t think [the broker] has treated Mr H fairly in turning down his claim.’

The FOS ordered the firm to pay Mr H £300 in compensation and an additional £750 – the maximum his home emergency deal would pay out.

In another example, a woman called Miss K had an air source heat pump that broke down in November 2022.

She made a claim to her home emergency insurer, QIC Europe, for the broken part – a condenser fan motor.

But QIC turned the claim down, saying the deal did not cover electrical components.

But the FOS sided with the homeowner, and said the policy wording actually did not exclude heat pumps. The Ombudsman said: ‘It describes itself as covering the “heating system” in the home, which is more broad than just conventional boilers, and encompasses other systems.

‘QIC had the opportunity to add clarifications or exclusions in its wording to ensure only conventional boilers were covered if it wished to. It didn’t do so, and the wording details that the heating system is covered. I do not accept that any of the exclusions listed in the policy applies.’

The FOS ordered One Insurance to pay Miss K £300 – the maximum the policy would have paid out if the claim was accepted.

QIC would not comment.

This post first appeared on Dailymail.co.uk