Considerations when using offshore insurers?
Lately we have been hearing that drivers (true car enthusiasts in particular) are starting to ask questions about who the eventual insurer is when they receive quotes for car insurance. One doesn’t have to look too far for a possible reason - there are increasing reports of offshore players either pulling out of the UK market or going into administration leaving policyholders high and dry.
Within the last 2 years we’ve seen 4 such providers exit the market in this way.
These providers are frequently the ones coming up first on the comparison site results. You know, the ones that are quite well below the next price from a name you have heard of, because they benefit from cost-savings and tax efficiency by being outside the UK.
It is impossible to assess an offshore provider’s financial ability to meet claims as they have no financial rating. It is difficult to determine their financial strength, stability and security. What’s more, they sit outside of UK regulation so policyholders don’t have the same protections as they would if a company in any EU Member state ceased trading.
When Enterprise Insurance collapsed in October 2016 the Financial Services Compensation Scheme stepped in, paying over £26m in compensation to more than 30,000 policyholders. The consequence is that UK regulated insurers and brokers foot the bill for that scheme through an annual industry levy which is ultimately reflected in your car insurance premium.
At Chris Knott Insurance we’ve never entertained using anything other than good quality, established and recognised UK insurers on our panel. We understand that drivers are often looking for the cheapest price, but that can be with scant regard to what it is they’re getting in return. It’s a gamble isn’t it – will I need to claim this year? Does this standout low price override my caution in using this insurer I’ve never heard of?
Don’t get me wrong, it’s not sour grapes on our part – we set our stall out differently. Our firm belief, and it’s echoed by our insurer partners, is that quality and security are as important as price to club members who lavish greater care and attention on their cars.
You’d expect your car club’s endorsed broker to regularly check its insurers’ customer service levels, reliability and the policy benefits provided and to make sure members have access to high-quality cover and value for money in place of cheapness wouldn’t you?
Chris Knott Car Insurance QUOTELINE: 0800 917 2274