New build home insurance policies at risk after the collapse of insurance firm Alpha

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The collapse of Alpha in May meant structural warranty policies with the company ended immediately. Advantage offers advice on how to ensure vital cover is maintained

Thousands of new homeowners have been left without vital structural defects insurance after insurance carrier Alpha went bust.

Many homeowners who require the 10-year structural defects insurance will still be unaware that they have been left without cover.

Alpha, which supplies the insurance new homes require to protect against structural defects, was declared insolvent in Denmark in May, meaning people’s cover has come to an immediate end.

Policyholders are slowly 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 homeowners.

“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 homeowners – 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.”

What to do if you were insured with Alpha

If you’ve found yourself on the receiving end of this bad news, don’t worry. Following Alpha’s collapse self-builders and property developers need to ensure homes continue to be covered and are safe from any future structural defects.

Check your insurer

If you’re not sure who you’re currently insured under, it’s paramount that you find out. Homes could currently be without cover, which will leave homeowners vulnerable to any number of structural defects.

Find an experienced carrier

Now, policyholders will have to take out fresh insurance that will need to last for the full length of their new-build home insurance – normally 10 years.

With the fall-out from Alpha’s bankruptcy, a key takeaway is the absolute necessity of finding a carrier who is not only trusted and reputable, but with key industry experience from a property standpoint.

The carrier will also need to be able to issue retrospective home insurance warranties, something many of the big carriers are unable to do, but Advantage can.

Should there come an instance where homes fall into physical damage, your insurer’s job is to shield you from excess and necessary costs which could prove detrimental – exactly what might happen to those who were insured with Alpha who don’t search for new insurance cover.

Do your homework

Make sure you protect yourself as much as possible by answering these questions before choosing your replacement insurance policy.

Does the policy fit your requirements?

Are you confident you have the right level of support for any eventuality?

Does your insurance broker provide a dedicated relationship manager to ensure help and advice are always available?

Is your chosen broker experienced in the property and construction sector?

Is the insurance policy underwritten by a specialist property insurance provider?

Can your broker commit to having your insurance certificate in place in time for completion?

About Advantage

Advantage is a structural defect insurance provider offering development-related insurances and services designed primarily to give you peace of mind – we understand that choosing the correct structural defects insurance can sometimes seem overwhelming.

Our policies are underwritten by industry-leading insurers with access to AA rated cover, Advantage has level 2 Trading Standards approval and staff have a wealth of experience with over 40 years in the construction industry offering a professional, experienced and reliable hand to those in need of our services.

For more information on Advantage visit www.ahci.co.uk or call 0845 900 3969.

If you are looking for a reliable and trustworthy provider of structural defects insurance then you can count on Advantage.

Contact us on 01925 850 765 to get the ball rolling.

 

Please note: this is a commercial profile.

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