CRL warranty not accepted

ras9zg

Really great to hear Midge about Build-Zone being widely accepted and a good one to use. We are leaning that way at the moment but still waiting to hear from some others. I think they are being underwritten by AMTrust Intl. but I have checked and it's an A rated insurer. So let's hope this never happens again...

Midge2020

There's a few docs you do have to lay your hands on for a retrospective warranty. This is what we had to get hold of
- building plans - often held on Council planning portal or via architect.
- Building Regs sign off - a must have
- Electricity and Gas Safe sign off Certificates
- EPC / SAP
- any separate insurances for flat roofed areas known as IBG's (builder should supply) as these are exclusions. Builders PI details.
- soil report
They might not all ask for this btw.

Warrantyexperts

ras9zg wrote: »

Really great to hear Midge about Build-Zone being widely accepted and a good one to use. We are leaning that way at the moment but still waiting to hear from some others. I think they are being underwritten by AMTrust Intl. but I have checked and it's an A rated insurer. So let's hope this never happens again...

As Midge says above the warranty is a hugely important piece of the house buying and selling jigsaw for any property less than 10 years old. Note though that Amtrust are pulling out of the UK defects market in April and things are very much up in the air at the moment. Warranties issued before April and going through Build Zone should be unaffected by the decision but quotations for Amtrust will not be available beyond mid April. My advice is to seek a professional broker that knows the market. They will find a way through the minefield of insurers and give you advice on the best way forward.

Midge2020

The FSCS new post today says CRL have been granted another 2 weeks to sort something out. I just can't figure out what to make out from this complicated mess. From reviewers of newly bought CRL policies, I'm personally glad that I've not held out for them to come good as apparently the issuing of certicates is taking forever ...not funny when you've got a lender breathing down your neck and a standard variable mortgage rate looming over you. It's like a game of Russian roulette waiting or not. Something I realised today is that if CRL were set up in 2009, then they have never actually fully honoured any 10 year warranty to date ....mmm.

Rebeccacarr11

Hello,

Any advice on the following issue would be gratefully received.

I purchased a new build flat in April 2017, with a CRL warranty underwritten by Alpha.

I’m now in the final stages of completing on the sale of my flat, as I’m currently living abroad, and I’ve been advised that the sale is unlikely to go through as Alpha are in liquidation and the mortgage lender needs the property to be in warranty.

Unfortunately, I don’t have any contact details for the developer (we bought the freehold off them and all email communication ceased) and I therefore don’t have the documentation or information needed to get a new quote. As far as I’m aware, the developer also hasn’t applied to be refunded.

Any idea on what my next step should be? Might also be worth noting that I’m struggling to contact companies due to the time difference and cost of calling the UK. I need the sale to go through ASAP due to mortgage costs and paying extortionate rent here.

Thanks in advance

Midge2020

Rebecca, I'm really sorry to read of your distress situation and can only assume more cases like yours will emerge.
Honestly, mid sale scenario that you have I would do two things to try and reassure your purchasers mortgage provider (it will be the banks solicitors due diligence check that will have picked this up).
Refer them to the latest FSCS CRL Alpha update page on 30/4/2019. The policy is allegedly "protected" by the FSCS and as things stand today, policy holders are still being led to believe that a resolution and transfer to a new policy will happen by 22/5/2019. Personally I do not think that this will mean that you will have a new Certificate in your hand on 22/5/2019....I'm sorry, I'm so sceptical about CRL. Their trust pilot reviews are shocking and have been for a long time. In the meantime, you just have to try and secure a replacement policy. Do try ICW (Paul McGale) .....the lack of documentation will mean a more in depth survey and a higher premium and probably more itemised exclusions: but at least you will have a policy in a few weeks. Don't forget that your property's plans and a lot of information can be readily accessed online through your Borough Council planning department portal on an address search so will be all in the public domains for a new provider to access if you can search out the council and planning app number. I do hope I've helped. Don't envy you one bit.

Midge2020

Sorry forgot to add....some buyers lenders may accept a new insurers cover note or note of comfort Pre certificate issue and once the premium has been paid by you. But that depends on who the lender is, some are more awkward than others. Also Buildstore might a good bet...bit slower, but you can pay them credit card directly I think so have an extra level of consumer protection under section 75.

Midge2020

Be interested to pick up and find out if anyone has actually got anywhere with a claim against CRL or BCR? I've looked into the broader picture around this. My take on the whole matter is this... Wind back a few years, the warranty market was monopolised by NHBC who also took it upon themselves to act as quasi regulators to any other market entrants. The Competitions authority recognised that this was not a great situation for consumers, and so the market was opened up. The FCA didn't pick up the regulatory reigns where NHBC had left off, and so in flooded a variety of new entrants offering products with unrated underwriters at vastly reduced rates to NHBC. It was a golden opportunity for anyone wanting to make a fast buck; high premium products with an overall low claim rate all geared up by aggressive sales forces and big teams to face off potential claims - very attractive to a money maker with the appeal of big gross margins and still undercutting NHBC. Further more, if you set up as an 'agent' not a broker as per CRL and others you could effectively dodge a lot of the consumer rights protections set up in this country. The FCA know all this. A lot of the blame lies with them for allowing cowboys to get a foot in the door. The FSCS seem spineless and are probably trying to claw back what they can for people to prevent a public fury. People who were sold an Alpha policy after Alpha went bust should just contact City of London Police -if they've still not had a refund. That's straight insurance fraud - taking money for a product knowing full well that there's nothing to back it up.

Warrantyexperts

Midge2020 wrote: »

Be interested to pick up and find out if anyone has actually got anywhere with a claim against CRL or BCR? I've looked into the broader picture around this. My take on the whole matter is this... Wind back a few years, the warranty market was monopolised by NHBC who also took it upon themselves to act as quasi regulators to any other market entrants. The Competitions authority recognised that this was not a great situation for consumers, and so the market was opened up. The FCA didn't pick up the regulatory reigns where NHBC had left off, and so in flooded a variety of new entrants offering products with unrated underwriters at vastly reduced rates to NHBC. It was a golden opportunity for anyone wanting to make a fast buck; high premium products with an overall low claim rate all geared up by aggressive sales forces and big teams to face off potential claims - very attractive to a money maker with the appeal of big gross margins and still undercutting NHBC. Further more, if you set up as an 'agent' not a broker as per CRL and others you could effectively dodge a lot of the consumer rights protections set up in this country. The FCA know all this. A lot of the blame lies with them for allowing cowboys to get a foot in the door. The FSCS seem spineless and are probably trying to claw back what they can for people to prevent a public fury. People who were sold an Alpha policy after Alpha went bust should just contact City of London Police -if they've still not had a refund. That's straight insurance fraud - taking money for a product knowing full well that there's nothing to back it up.

Midge...I suspect you and I are coming at this from similar viewpoints and broadly I'm in total agreement with what you have stated. The whole situation was avoidable but the desire of certain companies to make a fast buck seems to have overridden everything. I'd be careful with recommending other warranty providers overall because, as you say, I'm not sure that authorities have a handle on the situation now and another CRL could emerge at some point.


There are a couple of points though where clarification is needed. The first is the CRL are not a broker. Insurance brokers are subject to FCA regulations and will provide independent advice on various policies available. CRL were an appointed representative of BCR Legal and operated as a Managing Agent (MGA). This means that all the regulatory responsibility fell on BCR and not CRL who continue to trade. They have shifted their regulatory compliance to another firm now and continue to operate as appointed representatives. Their principle firm will be the one that is responsible for compliance.


The second is that it seems some have been successful with claims against CRL. There are a number of CCJ's, both satisfied and unsatisfied against CRL. What these relate to is not known but I suspect they are return premiums??


On a broader point, unrated insurers are used in various markets and are viewed with a degree of caution by brokers and insurers. Some are good and some are not. Unfortunately, usually it is too late when the poor customer is notified. Some very quick research tells me that around 11 insurers have gone bust in the last 10 years. All of those were unrated and based offshore. The FSCS has extended their deadline for CRL to find another insurer yet again. It has almost been a year since Alpha went bust....so I'd agree with you that the authorities seem fairly toothless or out manoeuvred.


Customers should be able to rely on an intermediary to assess and advise on the suitability and financial security of an insurer which a direct insurer or MGA does not. So my advice is use an independent broker who will advise on the market as well as the product they recommend.


I do feel sorry for some of the customers because many are still unaware of the situation and when they find out it is going to be difficult to sort out. Developers and Contractors should be facing questions as to why they felt it was acceptable to use CRL...

Midge2020

@WarrantyEx....sorry but I think we are coming at this from different angles - you being an industry person, me being an injured policy holder. But I do appreciate the dialogue and perspective nonetheless thank you.
CRL's small print may say that they are managing agents. But I would argue that most people ex industry don't realise this: purchasers, consumers and press. Only last week Telegraph Money were referring to CRL as a broker. My builder called them a broker. So they may say that theyre a managing agent but I just think that's to nobody's benefit other than their own and effectively gets them off the hook from a lot of consumer responsibility.
The market does have a number of unrated underwriters. I actually have no issue with this. What I take issue with is the failure to disclose to consumers and purchasers Pre contract that the underwriter is indeed unrated. I see in New Zealand of all places that this is a regulatory requirement - so lax that the UK authorities see no need to make this a requirement which just leaves the door wide open to mis selling in my opinion.
With regards to recommending alternatives - I'm not working in the industry I have no stake. But what I will say is that's a lot of Brokers will not take payment by a credit card whereas a direct purchase non broker will accept a credit card. Even if a broker does take a credit card, then section 75 consumer protection doesn't apply. Had I known this in 2016, I would have purchased my warranty directly myself with an insurer such as BuildZone directly on my credit card - and I would probably have retrieved the premium of my defunct policy.
Finally, a house warranty IS a consumer product. Consumers not builders make the claims. CRL and others may say otherwise but i disagree. If a house warranty is not a consumer product, then why on earth are CRL now industry champions of a Consumer Code of all things via Trading Standards!! !