Are you protected if your insurer goes bankrupt?

Some of you may have read this week that the US Federal Reserve has had to spend £48 billion to rescue one of the world’s largest insurers – AIG – to prevent it from going bankrupt. Although an American company, the collapse of AIG, had it happened, would have had severe repercussions in the UK as well, since large numbers of big organisations (and private individuals) in the UK are covered by policies underwritten by them, including Professional Indemnity and Liability policies, and a number of Personal Lines insurance products. The current economic downturn could see the demise of a number of large financial institutions, including insurance companies if no-one is willing to bail them out.

What if such a large insurer were to collapse during the current economic downturn? What would be the use of having Let Property Insurance to protect your investment if your insurer goes bankrupt or is unable to pay your claim?

Thankfully for investors, in the worst case scenario, as long as you purchase your policy through a broker or insurance provider which is authorised and regulated by the FSA, you will be protected by the Financial Services Compensation Scheme (FSCS). If the insurer who underwrites your policy is unable to pay your claim, the FSCS will in most cases pay for all or the large majority of your claim. (The exact amount will depend on the class of insurance and the total size of the claim. Any private individual should be eligible to claim for compensation, except in exceptional circumstances – please visit http://www.fscs.org.uk/ for more information on eligibility and how to claim if you think you are affected.)

Therefore at Click4Quote we recommend that you always purchase your Landlord Insurance from an authorised firm. Click4Quote are proud to have been authorised by the FSA since authorisation was brought in in January 2005, so all products we sell are protected by the FSCS.

If you would like to discuss your Landlord Insurance with us, you can email us at enquiries@click4quote.com or call one of our advisors on 01206 771755 (opening hours Monday to Friday 9am to 5.30pm) to discuss the options open to you, and how we can help.