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Bio diesel could make home insurance go up in smoke

07 August 2008 / by Rebecca Sargent
As the cost of fuel remains high, bio diesel is becoming a real alternative for many Brits, but making it at home could invalidate your home insurance warns Defaqto.

Fuel bills in the UK are more expensive than most of Europe according to research from In fact, according to its research, Brits have consistently paid around 20 per cent more for fuel since 2000 than the rest of Europe.

The average price of diesel in the UK is now 127p and petrol is around 114p, a decrease from last months highs, but still much higher than Brits have enjoyed in the past.

Which is why, according to Defaqto, bio diesel has grown in popularity as the government legally allows you to produce up to 2,500 litres of bio fuel a year absolutely tax free.

And, because bio diesel is made with used cooking oil, this cuts the costs further. However, Defaqto warns that home insurance policies should be checked before attempting to make bio diesel at home.

Sparked by a recent news story of a man who was injured when making bio diesel as a spark ignited the flames made in the process, causing an explosion, Defaqto warns of the dangers involved to people and their homes.

If an explosion does occur, it is possible that many home insurance policies would not pay out as they often request that 'reasonable precautions' are adhered to and that the policy holder, 'take all reasonable steps to prevent accidents, injury, loss and damage'.

But if an explosion could happen, then these steps may not be classed as having been taken so it is important to compare home insurance policies.

Mike Powell, consultant for general insurance at Defaqto, said: "The dangers of producing your own bio diesel are very real; however, for some people the savings to be made are very enticing. If you are intending to manufacture your own bio diesel, you should first check with your home insurer to confirm that cover will be provided against any damage caused to your home.

"Finding out after an explosion that cover is not provided could leave you in a disastrous financial position, as the costs of repair would be beyond most people's reach. If the worst was to happen and your home was completely destroyed, then being homeless is a far more worrying position to be in than saving a few pounds by producing your own bio diesel."

© Fair Investment Company Ltd