Costs

Self Builders with Alpha Insurance Policies Could be Refunded by Danish Guarantee Fund

Self builders who took out home warranties backed by failed group Alpha Insurance A/S could see their financial products refunded or replaced at no cost, Build It understands.

by Sofia Delgado

22nd November 2018

Earlier this year news that Alpha Insurance had declared bankruptcy rocked Britain as policy holders found themselves uncertain whether their homes were still covered.

As reported in Build It, Alpha offered insurance policies across the board through various UK brokers, including services to self builders who had taken out structural warranties for their homes.

Alpha Insurance collapse

In May, UK regulator the Financial Conduct Authority (FCA) had urged Alpha policyholders to liaise with their brokers to find alternative insurance products.

But according to documents seen by Build It, the Danish Guarantee Fund (DGF) could be working on securing alternative cover for self builders who took out the Alpha Home Warranty Policy with UK structural defects insurance provider CRL.

“The fallout of the Alpha bankruptcy has meant considerable reputational damage to the CRL brand,” says the CRL’s chief executive Steve Mansour.

“Many people assumed that it was CRL that had failed. Even when it was clear this wasn’t the case they quite reasonably said ‘We gave you the money, so you’re responsible’. The truth is that it is Alpha that is liable, and their liabilities are being largely assumed by the Financial Services Compensation Scheme (FSCS), under the terms of their protection scheme for policyholders – but we still got caught up in the fallout.”

CRL's CEO Steve Mansour addressing people at the town hall meeting

CRL’s Steve Mansour has addressed the public’s concerns over their structural warranties

CRL, which had incorporated Alpha into its policies back in 2015, have been working with both the UK and Danish guarantee funds to find a solution for its Alpha Home Warranty Policyholders.

Danish law indicates the Danish Guarantee Fund (DGF) should cover policyholders who took out the insurance products themselves, as is the case with UK self builders.

Transferring insurance policies

Just last month it was reported that 10,700 motorists had their Alpha insurance policies transferred to Markerstudy, thanks to a deal between the DGF and Right Choice Insurance Brokers.

And in a similar move, self builders who took out a structural warranty with CRL could benefit from a comparable deal.

Pernille Gram Christensen from trade organisation Insurance & Pensions Denmark told Build It: “The Danish Guarantee Fund only provides compensation for claims that have not been covered as a consequence of the liquidation of Alpha Insurance A/S, if the policyholder meets one of the following conditions:

“The structural damage insurance on the building originally was taken out and paid by a private person in favour of the person concerned; or the property (building) has been sold and passed over to a private person before the date of the liquidation of Alpha Insurance A/S (the 8 May 2018) and the structural damage insurance on the property (building) concerned also has been transferred either explicitly or in the form of a clear written commitment, which states that the private person can invoke the insurance directly. “

A spokesman for CRL said: “We have been in contact with the Danish regulatory authorities who have confirmed that those self builders who took out Alpha polices do qualify for compensation under their rules.

“As such the Danish guarantee fund has been given the details of those self build customers with Alpha policies. We expect that they would be due a full refund from the DGF.”