Boiler insurance is three times more expensive than the average cost of repairs, leaving those who pay for cover hundreds of pounds out of pocket each year.
The average boiler insurance policy costs £297 a year, while those without any protection pay just £87 in maintenance expenses, according to consumer campaign group Which?.
Britain’s largest energy company British Gas is expensive and “provides poor value for money” for their long-term customers, the research found. British Gas charged 19pc more than other providers after three or four years of a policy on average.
Boiler insurance providers typically offer lower premiums to new customers before increasing prices after the first year. More than 70pc of renewal quotes were more expensive than the previous ones.
However, the so-called “loyalty penalty” has been banned since September after the Financial Conduct Authority, the watchdog, intervened.
Households would be better off paying for repairs and services as and when they are needed, with cover being cost effective for just 0.4pc of people.
Only one in five have called an engineer for boiler repairs over the past year. Independent gas engineers tend to be cheaper and better workers than those at a big brand, according to Which?.
Lisa Barber, of Which?, said: “Year after year, our research has found that boiler cover is a false economy and most people would be better off paying for an annual service and repairs when needed.”
The Government announced a ban on new gas boilers from 2035, earlier this month. Early switchers will be offered £5,000 grants to buy heat pumps for their homes, in a bid to encourage homeowners to ditch their old gas boilers. But critics have warned just 90,000 homes will benefit from the grant.
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