Motor Insurance Cover for up to 50,000 Customers Worthless As Firm Fails
Up to 50,000 motor insurance customers have found that their cover is worthless because their insurance company has gone under and they have been urged to seek new deals from alternative insurers.
Danish company Qudos has gone into liquidation and it is not known as of yet whether the insurer will be able to pay outstanding insurance claims as payouts on claims have been put on pause.
This means that cover with the firm is essentially worthless for Irish customers, and those awaiting payment of a claim from Qudos could be let high and dry.
The Central Bank of Ireland said it "strongly" recommended that Qudos customers seek alternative cover as soon as possible. Is it possible that insurance customers will be hit with levies to cover unpaid claims just like what we saw with the collapse of Setanta Insurance or Quinn Insurance?
Liquidators now control the failed company, and it is now their job to secure as much money as possible for Qudos's creditors. They said that they are hoping to provide a further update within one or two weeks.
Both Denmark and Ireland have dedicated funds for paying claims of liquidated insurers, and both are potential options depending on how the matter progresses. The Central Bank is engaging with the Danish authorities, according to the Department of Finance. They said it, "may take a number of weeks to establish the extent and nature of the insolvency".
Qudos primarily operated in the motor, household and logistics and haulage markets within Ireland, providing services through insurance brokers.
Patrona, an Irish insurance company who provided administration services for Qudos here, said it has offered alternative insurance products to brokers. The brokers can pass these on at no extra cost to policyholders. The Qudos liquidators are unlikely to be able to provide refunds. Patrona said:
"In relation to claims, we have not received any formal instructions from the liquidator at this stage other than advice on the Qudos website today which states that claims will not be paid for one to two weeks.
"We can only assume at this stage that this is for administrative reasons while the liquidator evaluates the Qudos position and puts the necessary infrastructure in place,"
Patrona acknowledged the wait was "very frustrating for policyholders" and said that "as soon as we have more information we will be advising our brokers immediately".
Qudos is not the first insurance company operating in Ireland but regulated in other parts of Europe, to go bust. Setanta Insurance was regulated in Malta, while Enterprise Insurance, whose collapse also affected Irish customers, was regulated in Gibraltar.
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