Domestic emergency cover firm Homecall+ goes bust

Published 19th May 2011

Landlords and homeowners required to make new arrangements as emergency plumbing, heating and breakdown company falls


Thousands of homeowners and landlords find themselves today without domestic emergency cover: Homecall+ (Homecall Plus), one of the biggest firms offering insurance-backed warranties to cover plumbing, heating, drainage and electrical breakdowns, has gone bust.

Many policyholders who have been paying Homecall+ a typical £150 to £200 a year will now have to raid their own savings instead of calling out a repairer at no cost. For a major boiler problem, this could mean finding £5,000 or more. Customers may, however, be able to claim later on credit cards or from the Financial Services Compensation Scheme (FSCS) as Homecall+ was a regulated firm under the Financial Services Authority (FSA).

Based in Blackburn, Homecall+ was set up in June 2007 to meet an increasing demand from homeowners and buy-to-let landlords for a one-stop solution to domestic emergency problems. It offered a two-hour service from a nationwide network of "reliable, fully qualified engineers" and competed with larger rivals such as British Gas, Aviva, Direct Line and Homeserve, selling directly via insurance brokers and through employee benefits schemes. In December 2009, it became part of Willhart Holdings – John Steven Williams is a director of both companies. Williams was not available for comment.

Its policies were backed by Brit Insurance, one of the largest underwriters in the London market. But last December, Brit stopped underwriting new policies. It says it will continue to honour existing plans bought before 3 December 2010. Since then, it does not appear as though any underwriter was in place, making subsequent policies worthless.

The watchdog added "must not carry on regulated activities" in red to the firm's FSA register listing. The FSA says it could not then sell new policies – a regulated activity. It could, however, continue to service existing policies and look for a new underwriter. Homecall+ was under a legal duty to tell the FSA if it changed underwriters. There is no evidence of any new underwriter replacing Brit.

The FSA was unable to date this warning or say why no publicity was given to it. However, customers who contacted the FSA to complain about poor service have been directed to the statement. It appears – from website postings – that plumbers and other tradespeople were increasingly wary of working for Homecall+. One wrote earlier this month: "DO NOT repeat DO NOT do any work for this outfit. They have filed for administration, you will not get paid. £3k down the swanney, I got a court order but sadly not worth the paper it's written on. I hear that they were served with a winding-up order for £15k-odd by an unhappy contractor."

Homecall+ is now in the hands of the Insolvency Service, the government body that winds up companies in the public interest. Consumers with valid policies bought before Brit pulled the plug should contact the insurer.

Those with non-valid plans have two routes to recourse. Those paying by credit card can ask banks for a refund of premiums paid for worthless policies provided these are over £100. They can also submit invoices for work that should have been covered. They should quote Leeds District court reference number 2652011 as proof of insolvency proceedings.

The Financial Services Compensation Scheme will only act once a firm is "in default".

"The firm remained authorised on the FSA register even if it could not take on new business. We can cover up to 90% of any valid insurance claim and wasted premiums. Customers who believe they need to claim should contact us – the sooner policyholders do this, the quicker it is likely to be declared in default," the FSCS said.

Source: ' Guardian '

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