THOUSANDS of new homeowners have been left without vital structural defects insurance after insurance carrier Alpha goes bust.
Many homeowners who require the 10-year structural defects insurance will still be unaware that they have been left without cover.
Alpha, who supplies the insurance new homes require to protect against structural defects, was declared insolvent in Denmark last week meaning people’s cover has come to an immediate end.
Policyholders are just receiving the news that their homes are no longer insured and at this stage no plans have been announced by those who issue policies under Alpha as to how customers can be protected going forward.
David Sumner, Sales Director of Advantage Home Construction Insurance (AHCI), explained the importance of choosing sector specialist providers to ensure the quality and security of policies homeowners receive.
He said: “Much has been reported of the knock-on effect of Alpha going bust, car insurance policies and the impact on London black cab drivers.
“However, what hasn’t been highlighted is the impact this will have on thousands of new homes owners.
“This is a catastrophic blow for all of those whose beloved homes were protected from any potential structural issues by the now defunct Alpha.
“What is becoming worryingly apparent is the fact that as most policies are purchased via brokers many developers, and as a result many home owners, are now unaware that their policies are void.
“Information is beginning to slowly filter through, but unfortunately many policyholders will have to take out fresh insurance, which is an unwelcome and unexpected blow.
“We need urgent action to ensure that those who are affected are informed and what steps are now going to be taken to protect these now uninsured homes.”
Alpha, an unrated Danish insurer, said all policyholders will be contacted by the firm’s liquidators to offer guidance on what to do next.
Alpha is the latest in a string of companies that have announced they have gone bust or reducing their size in a bid to stay afloat in challenging markets.
The Danish FSA has announced that UK policyholders need to find and pay for alternative cover as soon as possible.
While the UK FCA has said Alpha insurance policyholders should immediately contact their insurance broker or firm who sold them their policy in the first instance in order to seek new insurance cover.
David added: “At Advantage all of our insurers are property sector experienced carriers to ensure we offer the best protection for our customers.
“As experienced property developers ourselves we know it is critical to provide the highest standard of building warranties to give customers the peace of mind that any structural faults or defects are covered.
“Unfortunately, the quality of cover provided differs widely in the industry and often homeowners have no idea who their policies are placed with or the ratings of the carrier.
“I would urge any self-builder or property developer to do their research and ensure they go with a broker who uses specific sector-experienced carriers as an absolute minimum.”