Everything you need to know about A-Rated and Un-rated insurers

Insurance is often a necessity and is certainly a legal requirement for motor insurance in the UK. Insurance provides the protection and security that assures you peace of mind in the event of an incident and it’s very important to be confident that you’ve got the right cover in place.

We exist to ensure that you can count on us to use our experience and insurance knowledge to find you the right product with the right Insurance Underwriter and at a great price too.

Insurers differ, operate from different countries and have either been ‘rated’ or not.

We work with a range of insurers, across the UK and Europe and it’s important that you’re entirely aware of what ‘rated’ and ‘un-rated’ means so you can make an informed decision on the insurer you choose.

What’s an un-rated insurer?

An un-rated insurer is one that does not carry an insurer ‘financial strength rating’ as provided by international rating agencies. The rating provides an assessment of the financial strength of an insurer and most importantly, its ability to pay claims.

Insurer ratings differ depending on the agency doing the assessment, however, most will use a simple scale of letter grades that indicate the degree of credit risk, A-C for example. An ‘A’ rated insurer indicates an excellent ability to pay claims, while a ‘C’ rating means that the insurer may be less able to pay claims.

Un-rated insurers could pose a greater risk because they have not been rated in terms of their financial strength and some foreign insurers are not subject to UK or EU insurance regulations. They may present a greater risk of failure, leaving customers uninsured and exposed to financial loss.

In the UK there isn’t a legal requirement for an insurer to be rated, and brokers (like us) aren’t required to only offer products and services from rated insurers only. Although both rated and un-rated insurers are capable of collapsing, statistically, it is the un-rated insurers that present a greater risk. There can however be many benefits to using an un-rated insurer.

Benefits of using an un-rated insurer

Un-rated insurers can be appropriate for a number of insurance underwriting circumstances. Some benefits of un-rated insurers:

They can sometimes offer more competitive rates than rated insurers.

They sometimes offer cover, owing to your personal circumstances, that a rated insurer can’t.

Whilst not strictly a direct benefit, you’ll also often find that an un-rated insurer is regulated by the PRA (prudential regulatory authority and the FCA (financial conduct authority) – these are the same regulators of rated insurers.

Risks of using an un-rated Insurer

Whilst A-C rated insurers also carry the risk of failure, using an un-rated insurer could pose a risk to you.

They will often have no verification of their financial stability, conducted independently.

Un-rated insurers are often based in Europe and beyond and may not be held to the same regulations as in the UK (or EU if worldwide)

What if an un-rated Insurer fails?

The FSCS (financial services compensation scheme) may step in and pay for claims that an un-rated insurer cannot if they are a member of the scheme. The un-rated insurer may well be a member of another similar scheme in their own country.

Not all similar schemes in other countries offer 100% compensation and may only offer compensation to individuals rather than businesses.

Our approach to un-rated Insurers

For some of our customers, un-rated insurers are a good option and on the rare occasion, the only option. We may therefore offer you products with un-rated insurers but we’ll always tell you if we do.

We work very closely with all our insurer partners and commit to only using those which have strong business representation in the UK. We constantly monitor their service standards, claims life cycles and complaints data to ensure they’re meeting your needs and our standards. 

So, we hope that’s enough information to allow you to make an informed decision, if not and you’d like to know more please contact us

Tel: 01206 688097

Email: [email protected]

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Frequently Asked Questions

Our policies cover accidental damage and theft, personal accident, public liability, cycle breakdown and accessory cover (when selected). If you are biking through Europe, you and your bicycle are also covered (see trip limitations in the terms and conditions) We also offer cycle hire while you are without your bicycle during a claim.

Your bicycle might be covered under your home insurance, but the cover is unlikely to cover all of your needs and could leave you without your bicycle for a considerable amount of time as home insurance claims can take a while to resolve. 

Home insurance isn’t designed with your bicycle in mind, so is unlikely to cover you for personal accidents, theft away from the home and public liability. Furthermore, if you claim on your home insurance, the excess you may be required to pay could be higher than the cost of having separate bicycle insurance. Naturally, your contents insurance premium may then increase when your policy comes to renewal because of the claim you made.

Please make sure you view the benefits and cover of our bicycle insurance policy before you make a decision. If you’re not sure, give us a call and we’ll help explain our cover options further.

Next Generation Insurance (NextGen) is an insurance intermediary helping our Customers look after what they love.

You can pay annually or monthly, remember, the contract is still an annual one. 

You can log into your customer area and make a change there by visiting gonextgencycle.co.uk/customer-area/login Alternatively you can call us on 01206 688097 or you can email us at [email protected]

We insure road bikes, mountain bikes and electric bikes (not scooters or mopeds).

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