The quality and security of insurers is a hot topic currently in the insurance world. In recent years we have seen both Gable and Enterprise leave the UK market leaving a trail of destruction behind them.
When an insurer goes into liquidation not only do policy holders potentially lose the policy which they’ve paid for and have to incept cover elsewhere, they risk not having claims paid which are ongoing.
In the UK however, policyholders may be able to gain assistance from the Financial Services Compensation Scheme (FSCS).
What is the FSCS?
The FSCS is a pool of money, provided by financial institutions, including insurers, designed to compensate certain customers who lose out due to the collapse of a financial services company. For customers hit by the demise of an insurance company, it refunds the full amount paid in premiums to enable the customer to go out and find cover elsewhere.
Anyone who has a claim that is being dealt with at the time of a company’s collapse is also covered by the FSCS.
This can take time however and not every policyholder is eligible for compensation. For example claims to the FSCS which involve UK compulsory insurance (such as your motor insurance or employers liability), will be covered and generally claims made by individuals are also eligible. However, other types of insurance, such as cover relating to businesses, are subject to stricter rules, with only smaller businesses being eligible to claim.
At ProAktive we try and make things simple and only deal with insurers who meet our minimum security requirements. We regularly monitor insurers’ security on your behalf and only recommend insurers who we feel are financially secure.
If you’d like some advice on insurers solvency or would like to discuss your insurance in more detail, please contact ProAktive on 01302 341344.
By Laura Scott ACII – Commercial Account Handler