Insurance Plans Vs. Maintenance Contracts

With so many different types of Home Emergency cover on the market, it can be difficult to know what you’re looking for.

Although level of cover can vary depending on the company, the main difference is whether you’re buying a maintenance (or service) contract or an insurance policy.

Maintenance Contract

A maintenance contract is an agreement between you and the service provider that it will cover the cost of a repair if something goes wrong.

As this is not an insurance contract, any repairs or replacements are carried out at the sole discretion of the service provider. This means they’ll use their judgement to decide whether or not they will complete the repair or replacement as part of your package with them.

Unlike an insurance policy, service contracts are not regulated by the Financial Conduct Authority and so you’ll have limited protection if the maintenance contract provider fails to fulfil its obligations or even ceases trading. Complaints are dealt with internally and if no resolution is found, you may not be able to refer the matter to an outside agency.

Insurance Policy

An insurance policy is a contract you take out with an insurer to protect you against specific risks under agreed terms.

Insurance companies are authorised and regulated by the Financial Conduct Authority (FCA) which set out standards to ensure you’re provided with clear, honest information about the protect before you choose to purchase it. There are also specific rules set out for these firms to follow when assessing complaints and should your complaint not be resolved, you have access to the Financial Ombudsman Service, who will help to settle any dispute fairly and impartially.

For this reason, a home emergency insurance policy is generally a safer option, but it’s worth checking that any insurer you buy from is correctly regulated. You can usually find this information in the footer of an insurance company’s website or on their policy documents and will confirm that they’re authorised and regulated by the FCA along with a registration number. You can look these up on the Financial Services Register for additional peace of mind.

To find out more about how our home emergency insurance could be here to solve your home emergencies and our various types of cover, including boiler and central heating and plumbing and drainage insurance, contact our friendly team on 0330 09 48 301 or get a quote online.