Warning over status of vehicle insurers

ANYONE buying car insurance should make sure the insurance company underwriting the scheme is authorised, writes Caroline Merrell.

A spokeswoman for the Association of British Insurers, the trade body for the insurance industry, said that if the insurance company name was not recognisable, potential policyholders should check the company is authorised by the Department of Trade and Industry's insurance division.

All insurance companies in the UK have to be authorised by the DTI, which last week issued a warning against Prima Motor Policies.

The company, which has been selling motor insurance in east London, is not authorised to carry on any class of insurance business in the UK. Anybody holding a cover note issued by the company should find alternative cover.

Prima Motor Policies was set up about six weeks ago, offering cut-price 30-day cover. Police are investigating and have arrested but not charged two men connected with the company.

The police have so far contacted 2,000 people who have taken out policies in the Walthamstow, Chingford and Greenford areas of London.

Many of the policies were sold to taxi drivers. Police are anxious to contact anyone in other parts of the country who has bought motor insurance from the company.