Would you buy plumbing cover from a water company?

HATE your water company? Now it is trying to sell you insurance for something you may have thought it partially responsible for. As winter approaches and the demand for plumbing services increases, Anglian Water is busy selling insurance to its two million customers against damage to internal and external pipes. The company says the householder is responsible for both sets of pipes.

Called the Home Service Scheme, it costs pounds 45 per annum and offers buyers pounds 150 worth of emergency call-out cover for internal plumbing, and pounds 550 for external problems, without excess.

Critics say Anglian's promotional mailings are unnecessarily alarming. Earlier this year, Anglian was forced by the water services regulator Ofwat to withdraw its promotional material. The regulator felt the risk of plumbing problems had been exaggerated and was concerned that Anglian did not make it clear that household insurance would cover some of the risks.

The current sales message could also be seen as unnecessarily alarming. In the campaign leaflet, the key selling proposition is the claimed need for insurance against damage to underground water pipes connecting houses with the public supply. The sales literature says help can be expensive, as heavy digging equipment may be necessary.

But both Green Flag National Breakdown Home Assistance Services, which offers plumbing insurance, and the AA, which operates an approved contractor referral scheme, state that they only come across this problem once in a thousand calls. Gesa Assistance, however, the underwriting insurer behind Anglian's scheme, says 15-20 per cent of claims to date are for leaks in underground piping.

Whether the Home Service Scheme offers value for money or not depends on your perception of the risk your property presents. If your piping is made of newer plastic or ceramic materials, and you believe your plumbing is in fairly good order, the scheme could be a waste of money.

But if you have an older house, which is liable to problems caused by wear and tear, especially properties with pre-war lead underground piping, this cover may be for you.

The average national emergency job rate for a plumber is pounds 120. Underground digging work can cost hundreds of pounds. The average householder calls out a plumber once every seven years according to the AA; once every four in Green Flag's experience.

Standard home insurance policies cover accidental damage only and often charge excesses of pounds 50 to pounds 100. People interested in emergency cover should check their household policies to avoid being doubly insured.

The plumbing services for Anglian's policy are supplied by a franchise service. Gesa says the scheme is marketed by other water companies besides Anglian, but declined to say which. Thames Water said it has not yet signed up for a plumbing or general household scheme but is keeping a watching brief.

One advantage of belonging to a call-out service is knowing you have an approved practitioner you can rely on, who is guaranteed to arrive within a couple of hours, with limited costs known in advance. This peace of mind can be important when disaster strikes. Too many people are caught by cowboys from the Yellow Pages.

Green Flag sells an emergency breakdown product, which offers cover for plumbing together with other household problems with heating, roofing, electrics, cookers, broken windows and so on.

Premiums ranges from pounds 15.99 to pounds 96 a year. The scheme covers the first four hours of service plus pounds 100 of parts. Seven of the water companies and electrical utilities market this product, including Northeast Water and Yorkshire Water.

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