Earlier this month we welcomed AXA Insurance UK Plc to our insurance panel alongside our long-term partner AmTrust Europe Ltd.
This means all LABC Warranty products are now backed by at least two ‘A’ rated insurers.
We explain what this means for you and why the rating of your insurance provider is important.
What is a financial rating?
A financial or credit rating is an independent evaluation of an insurers ability to meet their financial commitments (most importantly pay claims).
What is the financial rating of the LABC Warranty insurers?
Both of our insurers, AmTrust Europe and AXA Insurance UK Plc are ‘A’ rated. This means they are considered to have an excellent ability to meet on-going insurance obligations.
What does a financial rating mean to you?
The better the financial rating of an insurer the more likely they are to be able to meet their financial commitments, such as paying valid claims under your warranty cover. It is particularly important for an insurer to have this financial stability with long term cover such as warranties, to give you reassurance they will be able to meet their financial obligations over the 10/12 year period of your warranty.
What if an insurer does not have a financial rating?
If an insurer does not have a financial rating, there has not been an independent evaluation of their finances. As a result, there may be more uncertainty over the ability of the company to meet future claims.
What happens if an insurer cannot meet claims costs?
If the company is regulated by The FCA then some of the claims costs may be met by the FSCS (Financial Services Compensation Scheme). Depending upon the circumstances the developer or contractor could also be liable for the valid claim.
So what is the benefit of placing cover with an insurer with a strong financial rating?
There is more certainty they will be able to meet claim costs, protecting you and your customer. An insurance policy is a promise to pay in the event of a valid claim; this becomes worthless if the company is unable to keep this promise.
You can learn more about our insurers here.
By Craig Ross