[John L]

Howdy all

I've been bombarded with heavyweight letters from Glow-worm trying to
persuade me to buy insurance for the boiler that was installed in 2008,
and also to buy Homeserve Plumbing and Drainage insurance.

I've been receiving them since the boiler was first installed:
"Charming," I thought. "I pay 'x'hundred pounds for a new boiler from
you, and you immediately start telling me it's going to fail sooner or
later, and it'll cost me hundreds unless I subscribe to your insurance
scheme."

Ditto the Homeserve letters (also from Glow-worm), which invite me to
pay nearly £100p.a. to guard against failures that "can easily cost
hundreds" (the scenarios are nicely illustrated of course).

I object strongly to these kinds of schemes, which seem to be basically
a form of blackmail, and must certainly be successful on less wary,
and/or more helpless people.

HOWEVER: I'm now concerned that the whole industry of plumbing and CH
has gone the way that the motor bodies industry went some years ago:
they're all in bed with each other, and the "cost" of jobs is tied not
to what it really costs, but what the insurance companies are willing to
pay out (which in turn drives up insurance premiums for "the punters").

So cutting the long story short: should I start forking out 200 quid a
year to guard against disasters (100 for plumbing + 100 for the boiler),
or should I continue on my sceptical path, and take a (genuine) punt
against the odds?

Cheers
John

[[email protected]]

The purpose of insurance is to help you pay for stuff that you
otherwise couldn't afford - like your house burning down.

If you can afford the bill, it will always be cheaper just to pay it
when it arrives.

And you have your choice of who supplies the product/service - and
don't have to deal with "But we already have your money (sir), so
you'll get whatever we think you should get (if anything at all)".

[Usenet Nutter]

On Fri, 5 Mar 2010 09:50:02 -0800 (PST), "
wrote:

The purpose of insurance is to help you pay for stuff that you
otherwise couldn't afford - like your house burning down.

If you can afford the bill, it will always be cheaper just to pay it
when it arrives.

And you have your choice of who supplies the product/service - and
don't have to deal with "But we already have your money (sir), so
you'll get whatever we think you should get (if anything at all)".

And the Homeserve Policy I looked at when my Alpha Boiler 3 year
Warranty ended a few weeks ago which cost about £8 a month only
allowed 2 callouts in any year of the policy .

[Phil L[_2_]]

John L wrote:
Howdy all

I've been bombarded with heavyweight letters from Glow-worm trying to
persuade me to buy insurance for the boiler that was installed in
2008, and also to buy Homeserve Plumbing and Drainage insurance.

I've been receiving them since the boiler was first installed:
"Charming," I thought. "I pay 'x'hundred pounds for a new boiler from
you, and you immediately start telling me it's going to fail sooner or
later, and it'll cost me hundreds unless I subscribe to your insurance
scheme."

Ditto the Homeserve letters (also from Glow-worm), which invite me to
pay nearly £100p.a. to guard against failures that "can easily cost
hundreds" (the scenarios are nicely illustrated of course).

I object strongly to these kinds of schemes, which seem to be
basically a form of blackmail, and must certainly be successful on
less wary, and/or more helpless people.

HOWEVER: I'm now concerned that the whole industry of plumbing and CH
has gone the way that the motor bodies industry went some years ago:
they're all in bed with each other, and the "cost" of jobs is tied not
to what it really costs, but what the insurance companies are willing
to pay out (which in turn drives up insurance premiums for "the
punters").

So cutting the long story short: should I start forking out 200 quid a
year to guard against disasters (100 for plumbing + 100 for the
boiler), or should I continue on my sceptical path, and take a
(genuine) punt against the odds?

Cheers
John

Don't pay it.

Save the money and get a new boiler if and when it shuffles off this mortal
coil....probably 10+ years down the line from now.
In the meantime, you might need a plumber, but ring a reputable, local
one-man-band type chappy and he'll fix anything that needs fixing at a
reasonable rate, and the chances of needing him anually, *and* him charging
you £200 a time are slim to zero, meaning you are quids in.

--
Phil L
RSRL Tipster Of The Year 2008

[js.b1]

1 - Homeserve covers emergency temporary repairs ONLY.
Those repairs may themselves necessitate higher costs when properly
repaired. You may already have such cover under your house insurance.

2 - Boiler insurance comes down to odds.
Probably not worth it whilst the boiler is 1-3yrs old, perhaps worth
it year 4+ if your own diagonstic ability is limited and you can't get
hold of a proper factory flowchart.


Car Warranty are a dangerous area.
Certain car types are extraordinarily expensive to repair - any recent
Common Rail Turbo Diesel can leave you with a bill for a new engine by
a) design b) error c) mad diagnostics. Other "simpler" cars still
leave you with the blown headgasket, damaged gearbox, top/bottom-end
repair.
Avoid automatics from anyone who doesn't know them well - they can be
£1500 repair plus fail again in short order. Many car supermarkets
have hilarious terms & conditions like Carcraft; the warranty excludes
normal wear & tear. Avoid particularly fancy cars from non-mainstream
makes. Avoid popular small cars as they can be ridiculously overpriced
compared to off-beat but reliable larger cars, where rust protection &
components can be higher quality. Likewise the cost saving of super-
whizzo engines can be negated by 1) servicing costs 2) failure costs
3) catastrophic cost.

There is a reason many companies lease vehicles 1) they get a deep
discount because the private buyer subsidises the scale 2) if it
really goes down the pan they have a means of exit 3) when they sell
in 3 years the car has depreciated little compared to the price they
pay. The private motorist bends over with a sign "Park Here" on their
ass.

Honest John should be your first stop re car ownership re a) what to
buy b) if you bought it what the risks are.

Boilers, well uk.d-i-y is as good a place as any.
Drains, check your household insurance covers them - if not change to
one that does.

Insurance is good for things like houses and things with single point
of failure that is close to cost of new (TV panel, Laptop panel or
mainboard/planar). Warranty is good for things like washing machines,
hunt around for the free 3yr or 5yr deal. I'm astonished at what Argos/
Dixons/Comet get away with charging for warranty - but that's their
business model.

Self insurance can be very effective, even 20/month or 30/month - you
could have picked a commodities fund (broad, not just gold or oil), or
emerging markets fund. After 3yrs you've enough for "Quite A Tooth
Sucking Bill" :-) and since you accumulate monthly you even out the
+50% & -50% swings, ie, pick something very volatile that is not
secular (Gold can be for example when the asset bubble does eventually
pop). Alternatively pick things decorrelated such as a global equities
fund at 20/month and global commodities fund at 20/month. Far better
than paying £5+8+12+20+18+42/month on various appliance, product,
service insurance policies. Just keep it separate from everything else
re "dip in" :-)