Thousands of UK drivers might find themselves uninsured despite paying for car insurance, a financial expert has warned.
Martin Lewis, founder of consumer information website Money Saving Expert, said that as a result of MCE Insurance Company Limited falling into administration last year, the insurer had to cancel more than 100,000 of its auto insurance policies.
The finance journalist added that those with car or van insurance policies with company were “especially” affected, as reported by the Manchester Evening News.
“MCE Insurance Company, which was one of the UK’s biggest motorbike insurers, is to cancel all of its 105,000 remaining policies after falling into administration last year,” said Lewis. “The move comes despite the insurer initially promising to honour existing cover.”
“For policies taken out prior to November 09, 2021, the shake-up means car or van insurance cover will end at midnight on January 14, 2022,” he added. “Cover for motorbike or scooter insurance will end at midnight on January 31, 2022.”
Lewis has also urged motorists to arrange a new policy as soon as possible and informed drivers that they were eligible for reimbursement for any unused months as part of the government’s refund scheme.
“The Financial Service Compensation Scheme (FDCS), which is government-backed, will pay you back 90% of your pro-rata refund for unused months,” he said. “You won’t quite get it all, [but] you will get most of it. Equally, if you’ve got an existing legitimate claim, they will pay you at least 90%, depending on circumstances, of your payout.”
Last November, the Gibraltar Financial Services Commission (GFSC) announced that MCE Insurance had entered administration. The insurer sold motorbike and car insurance to clients in the UK and Ireland.
The policies were sold through its Northamptonshire-based broker, MCE Insurance Ltd (MCE UK), which also provides various administration services, including claims management. MCE UK is not under administration, noted Kroll, the corporate investigations and risk consulting firm tasked to become the insurer’s administrator.
MCE Insurance ceased writing new policies for UK customers on November 05, according to the Financial Conduct Authority (FCA), with existing insurance policies remaining in force and valid until their renewal dates.