If you've a car insurance policy underwritten by Enterprise Insurance, you should urgently check if you're still covered, after the firm went into receivership today (26 October).
Enterprise, which went into administration on 25 July, underwrites car, gap and tyre insurance policies for companies such as the AA and Car2Cover. Around 46,000 car insurance customers are expected to be affected by the company's collapse.
The Financial Services Compensation Scheme (FSCS) - the compensation fund of last resort for customers of authorised financial services firms - says some brokers have automatically transferred policies to a new underwriter, meaning you'll still be covered and don't need to do anything.
But in other cases policies aren't being transferred. In that case, you'll get a refund from the FSCS, but should urgently check if you're still covered and if necessary arrange alternative insurance. See full help in our Cheap Car Insurance guide.
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How do I know if my policy's underwritten by Enterprise?
If you're unsure whether your policy is underwritten by Enterprise, you should check your policy documents - or if in doubt, speak to your broker. We're asking the FSCS for a list of providers with Enterprise policyholders and will update this story when we hear back.
What happens next for Enterprise customers?
This morning, the liquidator invalidated Enterprise’s motor insurance policies (meaning the firm will no longer accept insurance claims).
Different brokers have different solutions in place to cover affected policyholders. Some may simply cancel the policy.
In that case, you'll receive a refund for the remainder of your policy from the FSCS. This is done automatically and you don't have to do anything to claim - but you will have to arrange alternative cover. It's important you do this. Under UK law, you're not allowed to drive or keep a vehicle on the public highway without third party insurance
Other companies, including the AA, have confirmed that policies underwritten by Enterprise are simply being transferred to another underwriter. That means your policy will remain intact and you don't need to do anything. The AA will be contacting affected customers to confirm these changes.
So how will I be compensated?
If your policy's not being transferred, then how you receive compensatioon will depend on how you originally paid for your insurance:
- If you paid with a loan or a credit card... the compensation you're due will go directly to the loan or card company to pay off the debt.
- If you didn't pay with a loan or credit card... the FSCS will send you a cheque covering the remaining payments left on your policy – this should be issued within two days. If you paid for your annual policy upfront your compensation will reflect how long left you had left to run on your policy.
More information about how the FSCS will compensate consumers is available on its website.
What does the FSCS say?
FSCS chief executive Mark Neale said: "FSCS is now paying compensation to thousands of policyholders now that Enterprise motor policies are no longer valid. If you are not sure if you are eligible for compensation then speak to your insurance broker.
"I would strongly urge you to check your insurance and if necessary find new cover immediately to avoid breaking the law and putting yourself and others at risk by not having a valid insurance policy."