Car insurance company gone bankrupt

[robbeech]

So an interesting email today from my insurance broker to say that on the 8th May the company I’m covered with went bankrupt and my cover no longer exists.
Luckily it’s only my personal vehicles although it does leave me absolutely stuck.
I’ve just received a text message telling me that all cover is void with immediate effect.
Has anyone had this situation before? Where does the broker stand in this donwe think? Of course they are staying open later tonight but phoning them just cuts off so clearly I’m not going to get anywhere with that. Luckily my car was in our unit car park when I have received this message. I don’t fancy going home in a DAF 18t truck though.
What an absolute farce, the broker made a right dogs dinner of the renewal In February as it was. I’m not so worried about having to pay for more cover and then claim it back it’s obly around £1200 (multiple cars) but it’s just such a faff and left me and no doubt countless others in trouble.

 

[trash80]

Which company is it?

 

[alxndr]

Where would someone stand if they didn't get the message immediately (e.g. in an area with no mobile reception or travelling at the time), continued using their vehicle unaware that anything was amiss, and then had an accident?

 

[GB]

I don't think there are too many grey areas when it comes to car insurance and the law, its a case of you either have insurance or you don't. The law doesn't care why you have no insurance even if its a honest mistake whether by you or not.

Hopefully those affected can get some money back from the FSCS who are I believe looking into it.

 

[Failed Unit]

Where would someone stand if they didn't get the message immediately (e.g. in an area with no mobile reception or travelling at the time), continued using their vehicle unaware that anything was amiss, and then had an accident?

Doesn’t the government become the insure of last resort in this case. I think they have a fund to cover uninsured drivers so people on 3rd party insurance don’t get screwed if the have an accident with one.

Personal opinion. I would be amazed if you could get prosecuted for driving with no insurance the day it happened. Next day maybe.

 

[swj99]

Is it this one ?

Unrated Alpha policyholders scramble for new cover amid bankruptcy

Liquidators of the Danish insurer files for bankruptcy and policyholders are advised to seek new cover

https://www.insurancetimes.co.uk/un...or-new-cover-amid-bankruptcy-/1427079.article

Insurer Alpha goes bust - leaving thousands of drivers without cover

The company was declared insolvent in Denmark.

This means motorists have been without cover since May 8.

Alpha - which ran UK brands Cover My Cab and Protector - insured 700 taxi drivers and 10,000 private hire vehicles in London alone, the Licensed Taxi Drivers Association said.

https://www.birminghammail.co.uk/news/uk-news/insurer-alpha-goes-bust-leaving-14636291

 

[swj99]

Some more info about driving without insurance here....

http://www.driverdefenceservice.co.uk/No-insurance.php

Legal Defences
There are very few defences to driving without insurance. The only real defence is to argue that either you were not driving or that you were insured. Driving under the mistaken belief that you were insured at the time of the alleged offence is not a defence! No insurance is a strict liability offence. This means that it does not matter whether or not you meant to commit the offence - if, as a matter of fact, you did not have insurance in place at the time you were driving, then you are guilty. It is also a defence to be driving in the course of your employment and to be able to show the Court that your employer was responsible for insuring you and that you genuinely believed that there was proper insurance in place.

Special Reasons Arguments.
It can sometimes be argued that, whilst you are technically guilty of the offence in question because you were uninsured at the time you were driving, you have Special Reasons in relation to the circumstances in which you were driving, namely that you were driving under the genuine misapprehension that you were insured at the time. If you successfully argue that there are Special Reasons then the Magistrates have a discretion not to impose penalty points. In order to argue Special Reasons you would need to support your argument by giving evidence on oath and it is preferable to provide documentary evidence to the Magistrates in order to support your argument.

You may be able to establish Special Reasons if you have been mislead by the insurance company or somebody else as to the nature of the cover in place and this lead you to believe that you were insured at the time you were driving. You might also be able to argue Special Reasons if the insurance company cancelled the policy without good reason and failed to notify you of that in advance of the offence.

 

[robbeech]

Yes it is indeed Alpha. It is through OneSure as a broker. I have used them for a number of years with another insurer but this year (February) they found this company Alpha who were 20% cheaper and automatically renewed* me with them. Here we are in May and I’m wishing they’d not tried to fix what wasn’t broken.

*they wrote to me with a renewal quote and my policy is set by me to just renew unless I say otherwise so I had sufficient warning and opportunity to decline but for about £250 saving I was happy. Until now.

My main question was where does the broker stand in all this? What is their responsibility? If the answer is none the. I shall become one because that must make it the easiest job in the world.
They are the people I pay the money to, they are the people that provide me with the insurance certificate and policy documents, they’re the people I contact if I were to have an accident, and they’re the people that in our time if need are not answering the phones. They claim to have been open until 2100 instead of 1730 today but then have send a message to my phone saying sorry I couldn’t get through, they have been receiving a lot of calls. How do they know I tried? I called them from the office and they don’t have that number on file. Something doesn’t add up there.

 

[najaB]

How do they know I tried? I called them from the office and they don’t have that number on file. Something doesn’t add up there.

They must do or else how would they have been able to call you back?

 

[robbeech]

They must do or else how would they have been able to call you back?

But it was a generic text message to my mobile not a call. They have my mobile number on file and it was this they sent the initial text to to say actually it’s all cancelled but I didn’t try to call them from that number so how do they know I tried. Either way I’m currently on hold awaiting my turn to politely ask them if they can sort me a policy with tradewise who I wa with for years hassle free.

 

[Tetchytyke]

Insurance brokers are covered by FOS, should you think they missold you the policy...

 

[Crossover]

I have to say, it is rather concerning that insurance that one has taken out can be null and void just like that - really in cases like this, I'd argue there should be some arrangement put in place immediately to keep those covered, covered for a short time to sort out replacement cover - it is hardly the fault of the policyholder!

 

[najaB]

...in cases like this, I'd argue there should be some arrangement put in place immediately to keep those covered, covered for a short time to sort out replacement cover...

I had assumed, perhaps naively, that that was one reason why it was better to go through a broker than directly to the insurance company.

 

[muz379]

Where would someone stand if they didn't get the message immediately (e.g. in an area with no mobile reception or travelling at the time), continued using their vehicle unaware that anything was amiss, and then had an accident?

Chances are it is unlikely that the police would pursue you for driving without insurance if it could be demonstrated that you had an insurance policy that had been cancelled through no fault of your own without you being notified .

However any driver that you went on to be involved in an accident with would be unable to recover any costs from the insurer so could either pursue you as the driver personally or claim from the MIB like anybody involved in an accident with an uninsured driver

Doesn’t the government become the insure of last resort in this case. I think they have a fund to cover uninsured drivers so people on 3rd party insurance don’t get screwed if the have an accident with one.

Personal opinion. I would be amazed if you could get prosecuted for driving with no insurance the day it happened. Next day maybe.

the Motor Insurers’ Bureau not the government has a fund for people who have been involved in accidents caused by uninsured drivers , and in this case the fund would compensate anybody not at fault if the op in this case had caused an accident whilst unknowingly driving uninsured .

Unfortunately the MIB process can take an age

 

[robbeech]

I had assumed, perhaps naively, that that was one reason why it was better to go through a broker than directly to the insurance company.

I too had assumed this but it appears they essentially type the details in and find a cheap quote like I could do myself, add a commission and if anything goes wrong they wipe their hands of any responsibility. The plan is that I set up a new policy and pay for it in full and then I have to sort it out direct (ie not through the broker) to try and get a refund. A refund or at least part of seems fairly hopeful in fairness. It’s disappointing that it appears the broker does very little here.

 

[AM9]

I have to say, it is rather concerning that insurance that one has taken out can be null and void just like that - really in cases like this, I'd argue there should be some arrangement put in place immediately to keep those covered, covered for a short time to sort out replacement cover - it is hardly the fault of the policyholder!

Given the importance of insurance not only for yourself but also to others that might have a claim on you, it is your responsibility to deal with a company that you might expect to get through the year without closing. It is very rare for insurers to go out of business but when they do they are usually among those that offer policy prices that are amonst the lowest. If there was an option that provided an indemnity should the insurer go out of business (for an additional premium of course), would you always buy it?

 

[MotCO]

I seem to recall in previous years that when insurers go bust, they are often bought up by another company (or was that mortgage companies?). If so, why wasn't this done here?

 

[robbeech]

Given the importance of insurance not only for yourself but also to others that might have a claim on you, it is your responsibility to deal with a company that you might expect to get through the year without closing. It is very rare for insurers to go out of business but when they do they are usually among those that offer policy prices that are amonst the lowest. If there was an option that provided an indemnity should the insurer go out of business (for an additional premium of course), would you always buy it?

I do agree that it crosses my mind. The issue here is that this is through a broker who are there to find the best (not necessarily cheapest) deal. There will have be men cheaper options but my requirements are above and beyond the cheapest offering.

 

[AM9]

I do agree that it crosses my mind. The issue here is that this is through a broker who are there to find the best (not necessarily cheapest) deal. There will have be men cheaper options but my requirements are above and beyond the cheapest offering.

But were your requirements that were above and beyond the cheapest offering satisfied by one of the companies who quote the lowest prices for the normal basic policies?

 

[Starmill]

The law doesn't care why you have no insurance even if its a honest mistake whether by you or not.

The original post suggests that it has taken customers four days to be informed that their cover has been terminated.

If one has an accident between their cover expiring and them being informed of that, then arguably they haven't even made a mistake, honest or otherwise.

Of course strictly you might still be committing the offence. Did it really take them four days to notify you?

 

[Crossover]

Given the importance of insurance not only for yourself but also to others that might have a claim on you, it is your responsibility to deal with a company that you might expect to get through the year without closing. It is very rare for insurers to go out of business but when they do they are usually among those that offer policy prices that are amonst the lowest. If there was an option that provided an indemnity should the insurer go out of business (for an additional premium of course), would you always buy it?

So by extension, should us drivers validate our insurance is still valid every time we drive? Same for company cars, which I sometimes drive on company policy. Granted, information can be delivered quickly-ish through text or email (though I would be dubious of receiving an email or text telling me this anyway with all the spam doing the rounds) though isn't guaranteed to arrive for whatever reason and snail-mail could take some time.

 

[robbeech]

So by extension, should us drivers validate our insurance is still valid every time we drive? Same for company cars, which I sometimes drive on company policy. Granted, information can be delivered quickly-ish through text or email (though I would be dubious of receiving an email or text telling me this anyway with all the spam doing the rounds) though isn't guaranteed to arrive for whatever reason and snail-mail could take some time.

Clearly it means that the cheapest insurance policies are less valid than the more expensive ones even if you’ve paid a premium to get a broker to sort it out for you.

 

[robbeech]

The original post suggests that it has taken customers four days to be informed that their cover has been terminated.

If one has an accident between their cover expiring and them being informed of that, then arguably they haven't even made a mistake, honest or otherwise.

Of course strictly you might still be committing the offence. Did it really take them four days to notify you?

Yes. Friday morning an email from the broker stating that Alpha had ceased trading and that there would be an interim period (until 5th June) with emergency third party cover whilst an alternative policy was found and created.
Friday afternoon a text message saying that all cover was cancelled with immediate effect (contradicting the email)

 

[Crossover]

Yes. Friday morning an email from the broker stating that Alpha had ceased trading and that there would be an interim period (until 5th June) with emergency third party cover whilst an alternative policy was found and created.
Friday afternoon a text message saying that all cover was cancelled with immediate effect (contradicting the email)

That's pretty poor

 

[Crossover]

Clearly it means that the cheapest insurance policies are less valid than the more expensive ones even if you’ve paid a premium to get a broker to sort it out for you.

The cynic in me would say the broker will do whatever gives them the biggest profit...

 

[Condor7]

The cynic in me would say the broker will do whatever gives them the biggest profit...

I guess that shows what plonkers most cynics are then.
A broker is like any other retailer the vast majority of which try to give a good service with good value for money.

 

[robbeech]

So an update. A positive one in some respects. I’ve managed to speak to the correct department this morning. Contrary to what people have been saying they’ve actually been very helpful. They’ve set me up a new policy with someone else that is effective as of now. I was given the option to not pay anything for 7 days then pay in full, in halves or monthly though I opted to just get on with it and pay it all today. They’ve handled the application for refund/compensation for the last lot and will pass it on when they get it. This also contradicts what people are saying.
So all in all they’ve done a very good job and been most helpful.

 

[Crossover]

I guess that shows what plonkers most cynics are then.
A broker is like any other retailer the vast majority of which try to give a good service with good value for money.

Business is business

 

[eMeS]

So an interesting email today from my insurance broker to say that on the 8th May the company I’m covered with went bankrupt and my cover no longer exists....
...Has anyone had this situation before? ...

I recall it happened to me back in 1963/4 when I was working at Borehamwood - (before credit cards, Internet etc.). Heard when I got to work, and I remember doing some frantic telephone calling, and got a workmate to drive me over to Tottenham to a broker during the lunch break, and I was issued with a Cover Note with a new company. Can't remember the loss, but at the time I was driving a Jaguar MkVII, my car with the largest engine. Petrol was around 4 gals/£1. Since then engines have always been smaller...

 

[lyndhurst25]

You'd have thought that car insurance companies would have to have, you know, insurance against this kind of thing happening?