HomeServe was fined £30.6 million in 2014 for mis-selling insurance products, and was reprimanded by consumer group Which? in 2012 for selling potentially unnecessary insurance to thousands of customers under their water provider’s branding.
Do you need the insurance?
HomeServe has confirmed you do not need to take out this insurance, so it all comes down to personal choice and the level of risk you’re prepared to take.
The initial 12-month policy is 75p/month in the first year, but automatically renews in the second year, jumping to £10/month. The policy itself is not terrible for 75p/mth, but before taking out any new insurance, check if you’re already covered by an existing policy. Speak to your home insurance company first and see our Cheap Home Insurance guide for more tips to cut costs.
As a rule of thumb, if a pipe leak within your boundary causes damage to your property, you’ll likely be covered for the damage to your home under your home insurance policy, but it probably won’t cover the repair of the damaged pipe itself.
Some water companies may even provide free repairs to fix damaged water supply pipes, though this is often on a case-by-case basis.
Depending on what you want to protect, it may also be cheaper to self-insure. Instead of paying for the pipe insurance each month, put the same amount into a top savings account to build up your own emergency fund. If you have a problem, the cash is there to pay for it. If you don’t, the cash is yours.
How do you cancel?
If you’ve already signed up to a policy but have since decided it’s not for you, HomeServe says you can cancel at any point during your cover and without any penalty. You can do this by calling HomeServe on 0330 0247 002.