The collapse of Irish insurance giant Quinn Insurance could have some serious repercussions for its customers, according to reports.
Consumers are expected to be hit with a new levy of between one and two per cent of their car and home insurance to cover the shortfall in the price being paid by the companies acquiring the firm from the administrators. Anglo Irish Bank has agreed to buy the insurance company but will not take any losses on its books.
It is expected that the government will make up the shortfall by imposing a levy on every single non life insurance customer in the country – so it’s not just customers of Quinn Insurance that will be affected. Administrators are currently looking at an application asking the Government to cover the shortfall. The problem has arisen because the reserve capital at Quinn Insurance is not sufficient to cover losses from claims. Analysts suggest Quinn didn’t place enough money in reserve to cover claims.
With premiums likely to increase, consumers are advised to review their insurance products and ensure they are on the best deal for their needs.
The first step is to note down your renewal date, as most insurance companies charge cancellation fees if you terminate a contract early. When the renewal date is approaching, use a comparison website to compare deals from other insurers and see what’s available – some of the leading comparison websites can compare deals from more than 100 insurers with one search. As most insurers offer incentives to new customers it’s likely that you will be able to save money by switching – however, examine each quote carefully to ensure it offers the level of cover you expect and that there are no catches among the terms and conditions.
Remember that reducing your risk level to an insurer should help you save money irrespective of whether you switch or not. So for example, with car insurance, boosting the security of your vehicle, such as by fitting insurer-approved alarms and immobilisers, will reduce the risk of theft and therefore lower premiums. Similarly, parking in a garage overnight; raising your voluntary excess; agreeing to an annual mileage cap; and paying premiums annually instead of monthly should also help you save. With home insurance you may benefit from fitting smoke alarms, burglar alarms and joining a Neighbourhood Watch scheme.
Be on the lookout for special offers too. These can include car and home insurance promo codes offering you special savings if you switch to a certain provider; additional cover, such as a breakdown policy at no additional charge; and incentives for new drivers such as rapid bonus schemes and Pass Plus discounts.