Car insurer Nutshell gave lowest quote, however I’ve by no means heard of them

I was looking to renew my car insurance this week on a price comparison website and found the cheapest quote by far was from a company called Nutshell, which I had not heard of before.

In fact, several of the cheapest quotes were from insurers I was not familiar with, and I am unsure about it.

I went with Nutshell in the end, as car insurance is generally so expensive now and I was in a rush to get it all sorted.

But should I be concerned about going with insurers that are not household names, just to save money?

Insurer queries: If you haven’t heard of a car insurer, does that mean not to trust them?

Sam Barker of This is Money replies: In short, you have nothing to worry about here. 

Nutshell are a 100 per cent reputable company, and are subject to the same rules about consumer protection as any other insurance firm.

I will go into more detail, but I think your question sums up something very interesting about the often confusing nature of buying insurance through price comparison websites.

Nutshell is actually a broker, not an insurer, and so its job is to arrange your cover with one of the insurers on its panel, and help out with any claims. It was only launched in December 2022.

In turn, Nutshell is a trading name of BISL Limited. You may not have heard of BISL Limited, but you may have heard of some of its other trading names – Budget and Bennetts.

BISL Limited in turn is owned by a larger broker, BGL Group, which is owned by another larger broker, Markerstudy Insurance Services, the seventh-largest broker in the UK. That in turn is part of a large insurance conglomerate called Markerstudy Group.

Nutshell was the brainchild of BGL and an insurer, Covea Insurance, which was formed after buying Provident Insurance, MMA Insurance and Gateway Insurance.

As I say, this is confusing. There are around 200 car insurers in the UK, but the vast number of trading names and waves of buyouts means there are only 10 or so parent companies.

This can mean that, when using a price comparison website, most of the cheapest quotes might actually be from the same overall company, just via a number of different sub-brands.

One could argue there is a question about a lack of competition with how the UK car insurance market now works, though the industry would argue it is a) competitive and b) often loses money on this sort of insurance. But for you as an individual driver, that doesn’t matter in terms of how trustworthy Nutshell is.

It is regulated by the Financial Conduct Authority, and covered by the Financial Services Compensation Scheme.

That means it has to stick to some pretty strict rules about how it operates, and in the unlikely event it should go bust your money is protected.

The main thing to beware of with car insurance is buying something that doesn’t meet your needs, such as not covering something you really need covered.

This can easily happen accidentally, due to another recent car insurance trend – insurers and brokers hollowing out policies in order to make them cheaper, and therefore appear higher up price comparison websites, which tend to rank policies by price.

The other thing to watch out for is buying ‘car insurance’ from a firm that is not regulated, perhaps advertising through social media. These firms do exist, often preying on drivers bewildered by the high cost of car insurance and looking for a bargain.

Many drivers end up conned into buying what they think is car insurance, but is actually a worthless bit of paper. That means they are paying premiums for nothing, have no cover if they do need to make a claim and could even be prosecuted for unwittingly driving uninsured.

If you are ever in any doubt about whether to trust a car insurer or broker, there is simple research you can do to put your mind at ease.

Check if the firm is registered with the FCA, using the online FCA register. This will tell you if it is a legitimate firm, or one to be avoided.

But in a nutshell (sorry), you have nothing to worry about with picking Nutshell for your car insurance.