THOUSANDS of drivers are to lose their car insurance cover from today after a firm went bust earlier this year.
Premier Insurance Company Ltd, which underwrote policies for around 16,000 car and van drivers, collapsed into administration in October.
Watchdog the Financial Conduct Authority (FCA) recently warned the firm’s customers, who are mostly based in the UK, that they would no longer be covered from December 1.
Customers should have been contacted by their brokers to discuss options for finding alternative cover, the FCA said.
If you still need help finding new car insurance, you should contact your existing broker or the British Insurance Brokers Association (BIBA).
Driving without at least third-party insurance is illegal in the UK, and could land you with a £300 fine and penalty points.
You could also be disqualified from driving if you’re taken to court, and your vehicle could be seized by the police.
It could also leave you in major financial trouble if you end up in a car accident.
According to the RAC, it’s the drivers’ responsibility to ensure they are adequately covered.
Premier Insurance was placed into administration on October 14 following an application to the Supreme Court of Gibraltar.
Freddie White and Bradley Chadwick of Grant Thornton were appointed as joint administrators for the company, which stopped writing new insurance policies in January 2025.
What happens if my insurance provider goes bust?
If the company you’re insured with goes into administration, you will be informed by the insolvency practitioner – the firm appointed to sort out its finances.
You’ll be protected by the Financial Services Compensation Scheme (FSCS), which will give you a refund if your policy is not taken over by a new insurer.
They will refund you for the remaining portion of your policy premium.
Sarah Marin, chief customer officer at the Financial Services Compensation Scheme (FSCS), said: “We understand customers will be worried about how Premier Insurance Company Limited’s failure will affect their motor insurance policies.
“We’d like to reassure customers that FCFS is working closely with the Insolvency Practitioner, Grant Thornton (Gibraltar) to make sure all eligible UK policyholders are protected.
“FSCS will also protect eligible firms with an annual turnover of less than £1m.
“Premier Insurance Company Limited customers can be assured that their claims will continue to be considered against the terms of their policy.”
To stay in the loop, you can sign up to the FSCS website for updates on what is happening.
If you have any questions about your refund, you can contact the FSCS at https://www.fscs.org.uk/contact-us/.
If you’re not sure if your policy was underwritten by Premier Insurance, you should contact the broker that sold you the policy.
Be sure to keep all the paperwork about your policy to hand as you may need it in future.
What is car insurance?
Consumer Reporter Sam Walker reveals all you need to know about the basics…
Car insurance pays out if your vehicle is stolen, damaged, catches on fire or is involved in an accident.
As a minimum, it protects you against any damage you case to other road users, the public or their property – these are called third parties.
You only need to claim on your car insurance when an accident is your fault.
If another motorist is to blame, their insurance should pay out instead.
Car insurance, unlike home insurance, is a legal requirement and if you don’t have it you can be fined up to £1,000.
You can also have your vehicle seized and destroyed.
However, you don’t need to insure your car if it is classed as “off-road”, or holds a statutory off road notification (SORN).
The vehicle has to be kept on private land and not a public highway though.
Meanwhile, The Sun revealed earlier this year that tens of thousands of customers were left out of pocket after a funeral firm went bust will only get a fraction of their money back.
Prepaid funeral firm Safe Hands, which allowed customers to pay upfront for their own send-off so loved ones aren’t left to foot the bill, went bust three years ago.
But the company collapsed into administration in April 2022, leaving some 46,000 customers facing losses worth an estimated £83million in total.
It emerged that customers would only get 6p-9p in the pound back, which was slammed as “pitiful” by customers facing losses worth thousands of pounds.
