Boiler owners could end up paying thousands of pounds over the years for cover they do not need, says Which?
The consumer group said many people would be better off paying for repairs and services as and when they are needed.
Which? estimated that even if customers needed a typical boiler repair every year for 10 years, they could still end up around £2,000 better off typically than if they took out annual boiler cover.
It asked more than 7,000 of its members about their experiences of boiler repairs and services, and analysed costs to work out whether boiler cover or paying as you go is more cost effective.
Which? found just 6% of boiler owners would have benefited financially in the event of a repair if they had had boiler cover, with the overwhelming majority being better off paying when required for repairs and servicing.
Half (48%) of people surveyed needed to call out a boiler repair person in the past five years, with those without cover paying an average of £107 per repair.
With the average cost for an annual service being £80, the combined cost of paying when required was still £101 cheaper than the average annual boiler cover premium of £288.
More than a third of people surveyed reported that their boiler had not broken down at all in the past five years.
Nearly one in five (16%) in the survey said they had boiler cover. Two-thirds of them said it was for reassurance, as a catastrophic boiler failure could cost thousands of pounds.
People could instead set aside an emergency household repairs fund though in case the boiler breaks down.
The survey also found that almost a quarter of people who pay for boiler cover are still covered by the warranty. And if home emergency cover is included in a home insurance policy, either as standard or an optional extra, customers could be doubling up should they also have separate boiler cover.
Which? said most home emergency policies include some boiler repairs and sometimes even replacement, so it is worth consumers checking the terms of their policy.
The consumer group suggests customers consider whether they are getting value for money from their policy.
If they decide to remain covered they should check the levels of cover, shop around for other providers willing to offer a lower quote, or haggle with their provider when renewing policies.
Harry Rose, editor of Which? Magazine, said: “Our analysis shows that boiler cover is rarely worth the money – with excessive premiums costing customers hundreds if not thousands of pounds more than if they paid for repairs and servicing themselves.
“If you have boiler cover for peace of mind, there are simple steps you can take to get a better deal. Don’t pay for cover you don’t need and check you’re not at risk of having to pay extra for unexpected exclusions like servicing.”
Here are seven tips from Which? for keeping boiler costs down:
1. Do not pay for boiler cover.
2. Set aside cash for repairs.
3. Have an annual service.
4. Keep your heating system in good repair.
5. Do not risk invalidating your warranty.
6. Do not double up on cover.
7. Buy a good quality brand of boiler.