Mixed news for homeowners covered by Alpha Insurance

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Since the Financial Services Compensation Scheme (FSCS) announced last month that they would be paying compensation to Alpha Insurance latent defects policyholders, thousands of homeowners have been seeking alternative cover

This follows the collapse of the deal arranged by BCR Legal Group Ltd to provide replacement cover for Alpha’s 10-year latent defect/structural damage insurance policies due to a number of last-minute issues.

Alpha, who supplied the insurance required to cover structural defects affecting new homes, were declared insolvent in Denmark last May. At this time, anxious homeowners were gradually discovering that their homes were no longer covered by the insurance they’d paid for, causing problems with acquiring a mortgage or selling their properties.

For over a year, FSCA has been working with BCR Legal Group to attempt to provide replacement cover. When the deal they’d been working on collapsed, FSCA stated: “We recognise that a refund of premium may not be the outcome Alpha customers would have chosen and we deeply regret that it wasn’t possible to find replacement cover.”

At Advantage Insurance, which specialises in latent defects insurance, the team have been taking calls from hundreds of concerned homeowners, offering advice and quotations for new cover in recent weeks.

Advantage Insurance, sales director David Sumner, commented: “Our phone lines have been busy. Although the news that FSCA will be issuing compensation payments to those affected by the collapse of Alpha seems to provide some closure for homeowners, this is not the resolution that many had been hoping for.

“As Advantage specialises in latent defects insurance, working with leading insurers, a large number of home-owners who’ve found themselves without insurance have been contacting us requesting a quote for new cover, without which they may find themselves in breach of their mortgage terms and conditions and unable to sell their homes.”

Although the team at Advantage is working through all enquiries swiftly, they share homeowners’ frustration that although compensation is being paid, those affected are being left to foot the bill to cover any shortfall when buying new structural defects cover.

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