Heat pumps and solar panels are excluded from breakdown cover by leading insurance firms, presenting yet another disincentive for consumers to go green, i has discovered.
i examined home emergency cover policy information for six of the biggest insurance firms to see if they allow customers to claim if their more environmentally-friendly systems break down.
While traditional boilers are covered as standard, provision for heat pumps and solar panels is inconsistent, with several policies explicitly excluding them.
Analysis of the most recent policies published by Admiral, Aviva, Churchill, Direct Line, LV and Saga showed that three – Admiral, Aviva and Saga – have stated they will not cover damage to or failure of heat pump systems.
Admiral and Aviva confirmed that this was the case but Saga, when approached by i, claimed that it had recently introduced cover for heat pumps and a “policy wording change… to incorporate this” was in the works. It did not say when the policy would be updated.
A fourth provider, LV, does not mention heat pumps at all in its policy document. A spokeswoman for the firm said heat pumps are covered, however, and it is “looking at” updating its terms and conditions to make this clear.
Heat pumps are covered under the “home emergency” terms of both the Churchill and Direct Line home insurance policies, although solar panels are not.
Bean Beanland, a spokesman for lobbying group the Heat Pump Federation, said insurers’ refusal to cover heat pumps was “absolutely… a deterrent” to consumers who might otherwise make the switch from fossil fuels.
“Most consumers would probably expect it to be covered – it’s a standard product that Government is encouraging people to install,” Mr Beanland said.
The “ambiguity” in some policies means that some consumers might mistakenly believe their heat pump is covered and only find out when something goes wrong that they are not, he added.
The Government announced last week it was extending its flagship green heating scheme by three years. It aims to install 600,000 new heat pumps annually by 2028, up from the current figure of 50,000.
The Boiler Upgrade Scheme offers households £5,000 to replace their gas boilers with heat pumps. It was launched in April 2022 to help existing homes and non-domestic buildings in England and Wales reduce the cost of more environmentally-friendly heating systems.
But the scheme was heavily criticised in a recent House of Lords report with the Lords Net Zero Committee warning take-up is so low the national target for green heating is unlikely to be met.
High installation costs put off many homeowners from making the switch. The lack of breakdown cover is likely to further deter households.
It costs £150 to £200 on average to service an air source heat pump, according to GreenMatch, an agency that helps consumers transition to renewable energy.
Admiral states in its 2022 sustainability report that it is “committed to ensuring long-term sustainability… through our practices and policies” while Aviva announced in 2021 that it intends to become a net zero company by 2040 because “the climate crisis is the greatest threat facing our planet” and “taking action now is the best thing we can do for our customers, business, shareholders and future”.
Commenting on Saga’s decision to update its policy to include heat pumps, Mr Beanland said: “It’s good they recognise they have to change [but] there’s no point in someone changing the policy if they don’t tell people.”
Asked why insurers might be reluctant to cover heat pumps, he said: “I don’t think they understand the product, so they don’t understand the risk, and their natural view is to risk aversion. The default position [is] computer says no.
“Government should make clear there is no barrier for insurers. It should be saying to the insurance industry that there is no significant increase in risk in transferring from a boiler to a heat pump.”
The Department for Energy Security and Net Zero (Desnz) indicated it would not intervene, nor encourage providers to…