A significant motor insurance provider has collapsed into administration, leaving approximately 16,000 car and van drivers across the UK without valid cover.
What Happened to Premier Insurance?
Premier Insurance Company Ltd, which underwrote policies for around 16,000 motorists, entered administration in October of last year. The Gibraltar-based firm's failure means its customers are no longer covered by their existing motor insurance policies.
The Financial Conduct Authority (FCA) has issued a warning to the company's predominantly UK-based customer base about the cessation of their insurance protection. This sudden collapse has created immediate uncertainty for thousands of drivers who now find themselves potentially driving illegally.
Protection for Policyholders: The Role of the FSCS
The Financial Services Compensation Scheme (FSCS) has moved swiftly to address the situation. Sarah Marin, the FSCS's Chief Customer Officer, sought to reassure affected customers.
"We understand customers will be worried about how Premier Insurance Company Limited’s failure will affect their motor insurance policies," Marin stated. "We’d like to reassure customers that FSCS is working closely with the Insolvency Practitioner, Grant Thornton (Gibraltar) to make sure all eligible UK policyholders are protected."
The compensation scheme confirmed it would protect eligible policyholders and small firms with an annual turnover under £1 million. Crucially, it stated that claims would continue to be assessed against the terms of the original policies.
Urgent Steps for Affected Drivers
The FSCS has issued clear guidance for those impacted by the insurer's collapse. Its primary message is that driving without insurance is illegal, and drivers must act immediately.
All car, van, and motorbike policyholders who have received notice that their policy is ending must secure alternative insurance before that date. The FSCS advises discussing replacement cover with an insurance broker.
For customers unsure if their policy was underwritten by Premier, the advice is to contact the broker who sold the policy. The British Insurance Brokers’ Association (BIBA) offers a 'Find Insurance' service, and can be contacted on 0370 950 1790 for specialist motor insurance advice.
The FSCS continues to monitor the administration process closely alongside regulators, promising further updates on its website as the situation develops. Affected individuals can also find the original Joint Administrators’ notification on Premier’s website and useful information on the MoneyHelper site.
