In these uncertain times, it might be tempting to go for the cheapest possible option when it comes to your insurance products.
Sharrocks is warning those looking for cover not to base decisions on cost alone as it could be a risk that’s simply not worth taking.
Sharrocks looks to only work with rated insurers, which means they have been through rigorous financial testing and are more likely to be able to afford to pay out should the worst happen.
Unrated insurers pose a greater risk because their financial stability has not been verified.
They might also be based outside continental Europe and therefore not subject to the same regulations as those in the EU or UK.
In simple terms, if the worst happened, an unrated insurer might not be able to afford to pay claims, they could go bust themselves and you may have little recourse.
There are also reports that such unrated insurers are difficult to track down in the event of an issue.
Sharrocks managing director, Alan Doucy, believes part of the issue is that when business is placed with an unrated insurer, the risks are not explained with the right level of transparency to enable customers to make an informed decision.
Mr Doucy said: “If you’ve got a whole line of almost identical looking Ferraris lined up for sale and one is £30,000 cheaper than the rest, you would think there was something not quite right about it.
“Chances are you’d be right to think that. If it sounds too good to be true, it probably is.
“There is no such thing as too good to be true in the insurance world and in the worst case scenarios, you could be left without cover or the cash injection needed to keep trading.
“An insurer collapsing or withdrawing from the market is not an unlikely scenario. In recent years unrated insurers such as Lemma, Balva, Gable and Alpha Insurance A/S to name but a few have left policyholders out of pocket and in urgent need of finding alternative cover.
“Sharrocks is proud to work with rated insurers and our customers can have confidence that not only are we offering the best prices for their specific needs, but that our policies are placed with reputable insurers.”
Whether you’re looking for business, event or property insurance, give Sharrocks a try.