While heat pumps are heralded as key to the future of low carbon heating, home insurance companies are unable to keep abreast of change it would appear, with some key providers failing to include this technology within the scope of their home breakdown policies.
Heat pumps are becoming an increasingly popular choice for homeowners looking to reduce their carbon footprint and lower their energy bills in the long-term. However, the exclusion by some insurers has raised concerns among homeowners who have invested in ground or air source heat pumps, as they may face significant repair costs in the event of a breakdown.
Here we explore the factors that have led to this exclusion and provide insights into what homeowners can do to ensure that their heat pumps are covered in the event of a breakdown.
Which insurers are failing to offer breakdown cover for heat pumps?
For those choosing between a heat pump vs gas boiler, finding insurance in the event of a breakdown can be a factor to consider.
Of the six major insurance providers, Admiral, Aviva, and Saga outline in their Home Emergency cover policy documents that air and ground source heat pumps are excluded from cover, however gas boilers are not.
Aviva responded to Homebuilding & Renovating about this issue, stating: "We are committed to supporting the transition to greener forms of energy and we are looking to extend our home emergency cover to support heating systems such as heat pumps as customer demand grows. This will include putting in place an appropriate network of engineers to ensure we can support our customers should emergencies occur."
Admiral and Saga were contacted to clarify their reasoning for not providing cover but no response was given.
Which insurers DO offer breakdown cover for heat pumps?
Some insurers have outlined that heat pumps are covered under their breakdown cover policy, but only under certain conditions.
A Direct Line spokesperson said: “Our Direct Line and Churchill home insurance policies include optional home emergency cover which pays for emergency assistance if the main source of heating in the home fails. A central heating pump would be covered under the ‘home emergency’ terms of our home insurance policies, subject to it forming part of the main heating system."
LV also state that heat pumps are covered as long as it is the main heating source in the home.
However, all three providers only offer this scheme through their Home Emergency cover, which is an additional coverage to the breakdown cover.
It's also worth bearing in mind that, unlike with boilers, where a payment may be given for up to £1,000 if a boiler cannot be fixed and needs to be replaced, if a heat pump cannot be fixed then some insurance providers offer no alternatives for their customers.
What to look out for when taking out a policy
When looking to see whether your insurance company provides cover, checking your policy documents should be your first point of call.
For some providers, cover for heat pumps can be provided as an add on under Home Emergency cover, although others do not offer this option.
Under the Home Emergency cover section, you should check for exclusions and terms and conditions that apply to cover heating appliances.
However, Bean Beanland, Director for Growth & External Affairs for the Heat Pump Federation (HBF), suggests that the best way to be certain as to whether heat pumps are covered by your insurance provider is to speak to them directly and simply ask.
Why are insurers reluctant to cover heat pumps?
Bean Beanland believes a "lack of understanding and education" is to blame for these companies failing to provide cover. “I’m convinced this is all about understanding risk. Because they [insurance companies] don’t have a full understanding of the risk, as it’s a relatively new field, their default position is to not offer cover at all or to make it as difficult to get cover.”
This places another potential barrier to homeowners looking to install heat pumps, with the government's Boiler Upgrade Scheme, which seeks to drive up the conversion from gas boilers to heat pumps, already having a "disappointingly low" uptake of grants, following a Lords enquiry.
Baroness Parminter, Chair of the Environment and Climate Change Committee said: “The Government must quickly address the barriers we have identified to a successful take-up of the Boiler Upgrade Scheme in order to help grow the take-up of low-carbon heating systems. It is vital they do so if we are going to meet our Net Zero ambitions.”
Beanland adds: “These are issues that they are going to have to address. The question is more of a question when; not whether they will.”
In the interim, it's worth bearing in mind that some heat pump suppliers and manufacturers offer service plans, which may also cover a heat pump in the event of a breakdown.
