GAP insurers suspend sales
Discussion
TwigtheWonderkid said:
Sheepshanks said:
TwigtheWonderkid said:
FMOB said:
It only exists because standard insurers revert to trade values when a vehicle is a total loss rather than paying retail.
If insurers paid the true cost of a replacement vehicle gap insurance would be a solution looking for a problem.
Utter nonsense. If insurers paid the true cost of a replacement vehicle gap insurance would be a solution looking for a problem.
There are loads of people out there who never buy 2nd hand cars. The just don't want to, they only want to buy new. They might keep the car for years, but eventually want to replace it with a new car. So when their car gets written off long before they were wanting to replace it, how are they going to bridge the gap between the insurance payout and the cost of a new one, without gap?
Then there are the people with finance agreements where they owe more money at a given point than the car is worth retail. What about them?
How does the claims process work?
If you believe your vehicle may be declared a total loss by your motor insurer, there are a few simple steps for you to follow to make a claim on your Gap Insurance:
Call us on 01422 756 100. Our lines are open Monday to Friday from 9am to 5pm. It's important that you call us before any settlement from your motor insurer is accepted, or in any case within 120 days of the incident occuring.
One of our claims handlers will take your call. Our team will listen to your story and email over the claims form for you to fill out.
Once you’ve filled out the form, return it to us along with any required documents and we’ll check it to make sure everything is in order.
If everything is approved, you’ll receive your payout via bank transfer. We have a commitment to settle your claim within 10 days on receipt of all required documentation, but typically you can expect to receive your money in 48 hours.
When can I claim on my Gap Insurance?
You can only claim on your Gap Insurance once your car has been declared a total loss by your motor insurer. Typically this will be as a result of a road traffic incident (fault or non-fault), fire, theft or vandalism. For a simple accident, this process could take as little as 24 hours but in cases of theft it can take much longer as some insurers will wait to see if your vehicle is recovered.
Total loss means that:
You have made a claim under your standard motor cover and that claim has been agreed
Your vehicle has been forfeited i.e. the title has been transferred to your insurer
You have received a settlement from your insurer
You should still contact us prior to your vehicle being declared a total loss, this way we can negotiate a settlement with your motor insurer on your behalf.
The punter can't just accept the offer, they have to liaise with the GAP insurer. The GAP insurer will have a vested interest to ensure the insurer pays out the true market value and not a lowball offer.
Interesting posts. Call my cynical but offering my tuppence worth, insurers and their underwriters only get out of things when there’s likely to be less revenue generation and more complex and increased numbers of claims. Take home insurance in Florida for example where a large number of insurers will not offer policies in the state owing to hurricane and related flood damage claims proving excessive.
I suspect the increased numbers of EV’s are making insurers review their Gap products, knowing full well there is a glut of negative equity and rapid depreciation currently associated with them. They’re not going to offer products that are likely to impact their bottom
line when all said and done.
I suspect the increased numbers of EV’s are making insurers review their Gap products, knowing full well there is a glut of negative equity and rapid depreciation currently associated with them. They’re not going to offer products that are likely to impact their bottom
line when all said and done.
Grant1979 said:
Interesting posts. Call my cynical but offering my tuppence worth, insurers and their underwriters only get out of things when there’s likely to be less revenue generation and more complex and increased numbers of claims. Take home insurance in Florida for example where a large number of insurers will not offer policies in the state owing to hurricane and related flood damage claims proving excessive.
I suspect the increased numbers of EV’s are making insurers review their Gap products, knowing full well there is a glut of negative equity and rapid depreciation currently associated with them. They’re not going to offer products that are likely to impact their bottom
line when all said and done.
At the “ right price “ though specialist Insurer’s will get into Floridian cat insurance as they will do with any type of Insurance. I suspect the increased numbers of EV’s are making insurers review their Gap products, knowing full well there is a glut of negative equity and rapid depreciation currently associated with them. They’re not going to offer products that are likely to impact their bottom
line when all said and done.
Whether customers want to pay that right price is another question.
Insurers change strategies depending on what opportunities come along.
Also depends on whether they see it as potential large profit one year only or a longer term play.
Grant1979 said:
Interesting posts. Call my cynical but offering my tuppence worth, insurers and their underwriters only get out of things when there’s likely to be less revenue generation and more complex and increased numbers of claims. Take home insurance in Florida for example where a large number of insurers will not offer policies in the state owing to hurricane and related flood damage claims proving excessive.
I suspect the increased numbers of EV’s are making insurers review their Gap products, knowing full well there is a glut of negative equity and rapid depreciation currently associated with them. They’re not going to offer products that are likely to impact their bottom
line when all said and done.
It's not the insurers wanting to pull their products, it's the FCA forcing them!I suspect the increased numbers of EV’s are making insurers review their Gap products, knowing full well there is a glut of negative equity and rapid depreciation currently associated with them. They’re not going to offer products that are likely to impact their bottom
line when all said and done.
sturge7878 said:
GAP insurance was always a massive scam just like PCP finance. Crackdown long overdue.
In 2018 my car was stolen. It was 18 months old. The original list price was £67k and when it was stolen my insurer offered £43k. The PCP finance had a balance of £52k.
When I got the car, I spent £179 on a 3yr gap policy to cover the car up to new invoice replacement value.
For £179 I walked away with £15k in my back pocket from the gap insurer having paid the £9k negative equity to the finance company.
I'm not sure how that fits the definition of scam, unless it was the gap insurer you're suggesting scammed itself?
OddCat said:
Haltamer said:
If people *want* to buy it, why should they stop selling it?
It's the one policy type I have had the least hassle and most value from!
Don't be ridiculous. That would be free will.It's the one policy type I have had the least hassle and most value from!
Don't you realise that you can only do things nowadays if the Nanny State deems it 'safe' for you to do so......
Panamax said:
TwigtheWonderkid said:
Just not true. Gap insurance doesn't exist because of any failure of the motor insurance policy. It exists because people often owe more on their car than it's worth.
Cars depreciate. It's as simple as that. Trying to insure depreciation is a nonsense concept that people simply don't understand but it all sounds lovely when described by the salesman in the shiny showroom. Huge commission, fat margins, low overall payout. Classic smoke and mirrors from sales people in the so-called financial services sector.
Secondly, most people have new for old cover on their house insurance. People seem quite happy to pay extra to not have to worry about depreciation. Most people don't want enough money to buy a 5 year old sofa if their own 5 yr old sofa is damaged. They want enough insurance money to go and buy a new one.
Some people feel the same about cars. They don't want to sit in a car, not knowing who owned it before and what they got up to in it. They want a new car. Return to invoice gap allows them to do that, pretty much. Why is that a nonsense. Seems pretty sensible to me if 2nd hand cars aren't for you.
Forester1965 said:
sturge7878 said:
GAP insurance was always a massive scam just like PCP finance. Crackdown long overdue.
In 2018 my car was stolen. It was 18 months old. The original list price was £67k and when it was stolen my insurer offered £43k. The PCP finance had a balance of £52k.
When I got the car, I spent £179 on a 3yr gap policy to cover the car up to new invoice replacement value.
For £179 I walked away with £15k in my back pocket from the gap insurer having paid the £9k negative equity to the finance company.
I'm not sure how that fits the definition of scam, unless it was the gap insurer you're suggesting scammed itself?
"Gap insurance is a waste of time for me, therefore it's a waste of time full stop, therefore anyone who buys it is being scammed".
It's just a lack of understanding and empathy. They cannot fathom the concept that other people may have different needs and priorities to them.
briggsy1 said:
TwigtheWonderkid said:
Sheepshanks said:
TwigtheWonderkid said:
FMOB said:
It only exists because standard insurers revert to trade values when a vehicle is a total loss rather than paying retail.
If insurers paid the true cost of a replacement vehicle gap insurance would be a solution looking for a problem.
Utter nonsense. If insurers paid the true cost of a replacement vehicle gap insurance would be a solution looking for a problem.
There are loads of people out there who never buy 2nd hand cars. The just don't want to, they only want to buy new. They might keep the car for years, but eventually want to replace it with a new car. So when their car gets written off long before they were wanting to replace it, how are they going to bridge the gap between the insurance payout and the cost of a new one, without gap?
Then there are the people with finance agreements where they owe more money at a given point than the car is worth retail. What about them?
How does the claims process work?
If you believe your vehicle may be declared a total loss by your motor insurer, there are a few simple steps for you to follow to make a claim on your Gap Insurance:
Call us on 01422 756 100. Our lines are open Monday to Friday from 9am to 5pm. It's important that you call us before any settlement from your motor insurer is accepted, or in any case within 120 days of the incident occuring.
One of our claims handlers will take your call. Our team will listen to your story and email over the claims form for you to fill out.
Once you’ve filled out the form, return it to us along with any required documents and we’ll check it to make sure everything is in order.
If everything is approved, you’ll receive your payout via bank transfer. We have a commitment to settle your claim within 10 days on receipt of all required documentation, but typically you can expect to receive your money in 48 hours.
When can I claim on my Gap Insurance?
You can only claim on your Gap Insurance once your car has been declared a total loss by your motor insurer. Typically this will be as a result of a road traffic incident (fault or non-fault), fire, theft or vandalism. For a simple accident, this process could take as little as 24 hours but in cases of theft it can take much longer as some insurers will wait to see if your vehicle is recovered.
Total loss means that:
You have made a claim under your standard motor cover and that claim has been agreed
Your vehicle has been forfeited i.e. the title has been transferred to your insurer
You have received a settlement from your insurer
You should still contact us prior to your vehicle being declared a total loss, this way we can negotiate a settlement with your motor insurer on your behalf.
The punter can't just accept the offer, they have to liaise with the GAP insurer. The GAP insurer will have a vested interest to ensure the insurer pays out the true market value and not a lowball offer.
TwigtheWonderkid said:
Why is it a nonsense concept? If, due to depreciation, you have a car that could be worth less than you owe on it on a finance agreement, why is it nonsense to want to insure the difference. Otherwise, you might end up with no car and still be owing £5K on it.
Secondly, most people have new for old cover on their house insurance. People seem quite happy to pay extra to not have to worry about depreciation. Most people don't want enough money to buy a 5 year old sofa if their own 5 yr old sofa is damaged. They want enough insurance money to go and buy a new one.
Some people feel the same about cars. They don't want to sit in a car, not knowing who owned it before and what they got up to in it. They want a new car. Return to invoice gap allows them to do that, pretty much. Why is that a nonsense. Seems pretty sensible to me if 2nd hand cars aren't for you.
Nothing wrong with the concept at all but a 6% payout to premium ratio strongly suggests the pricing is a scam and the FCA is right to intervene. I'm sure if insurers published their payout to premium ratio they could tell the FCA to do one on the basis that the customer is making a fully informed decision. To put this "insurance" in perspective the NCR of car insurance is typically over 90%!Secondly, most people have new for old cover on their house insurance. People seem quite happy to pay extra to not have to worry about depreciation. Most people don't want enough money to buy a 5 year old sofa if their own 5 yr old sofa is damaged. They want enough insurance money to go and buy a new one.
Some people feel the same about cars. They don't want to sit in a car, not knowing who owned it before and what they got up to in it. They want a new car. Return to invoice gap allows them to do that, pretty much. Why is that a nonsense. Seems pretty sensible to me if 2nd hand cars aren't for you.
TwigtheWonderkid said:
Why is it a nonsense concept? If, due to depreciation, you have a car that could be worth less than you owe on it on a finance agreement, why is it nonsense to want to insure the difference. Otherwise, you might end up with no car and still be owing £5K on it.
Secondly, most people have new for old cover on their house insurance. People seem quite happy to pay extra to not have to worry about depreciation. Most people don't want enough money to buy a 5 year old sofa if their own 5 yr old sofa is damaged. They want enough insurance money to go and buy a new one.
Some people feel the same about cars. They don't want to sit in a car, not knowing who owned it before and what they got up to in it. They want a new car. Return to invoice gap allows them to do that, pretty much. Why is that a nonsense. Seems pretty sensible to me if 2nd hand cars aren't for you.
It's unrealistic - cars depreciate, that's the real world. If you can't afford to face that how are you going to buy your next car?Secondly, most people have new for old cover on their house insurance. People seem quite happy to pay extra to not have to worry about depreciation. Most people don't want enough money to buy a 5 year old sofa if their own 5 yr old sofa is damaged. They want enough insurance money to go and buy a new one.
Some people feel the same about cars. They don't want to sit in a car, not knowing who owned it before and what they got up to in it. They want a new car. Return to invoice gap allows them to do that, pretty much. Why is that a nonsense. Seems pretty sensible to me if 2nd hand cars aren't for you.
Just wondering, but do you know of any household insurer that doesn't provide New for Old cover? Even if that is a different topic altogether.
Return To Invoice GAP cover won't buy a new car anyway because prices will have gone up!
TwigtheWonderkid said:
Forester1965 said:
sturge7878 said:
GAP insurance was always a massive scam just like PCP finance. Crackdown long overdue.
In 2018 my car was stolen. It was 18 months old. The original list price was £67k and when it was stolen my insurer offered £43k. The PCP finance had a balance of £52k.
When I got the car, I spent £179 on a 3yr gap policy to cover the car up to new invoice replacement value.
For £179 I walked away with £15k in my back pocket from the gap insurer having paid the £9k negative equity to the finance company.
I'm not sure how that fits the definition of scam, unless it was the gap insurer you're suggesting scammed itself?
"Gap insurance is a waste of time for me, therefore it's a waste of time full stop, therefore anyone who buys it is being scammed".
It's just a lack of understanding and empathy. They cannot fathom the concept that other people may have different needs and priorities to them.
pheonix478 said:
OddCat said:
Haltamer said:
If people *want* to buy it, why should they stop selling it?
It's the one policy type I have had the least hassle and most value from!
Don't be ridiculous. That would be free will.It's the one policy type I have had the least hassle and most value from!
Don't you realise that you can only do things nowadays if the Nanny State deems it 'safe' for you to do so......
I’ve bought it, direct from ALA and others, to protect new and lease cars, the leasing specific ones were a hybrid covered the extra fees often levied with a write off equalling an early termination.
These were a fraction of the costs offered by the dealer, and to be fair to them, it’s never been pushed, but is always offered.
What next, invisible paint protection?
These were a fraction of the costs offered by the dealer, and to be fair to them, it’s never been pushed, but is always offered.
What next, invisible paint protection?
Some seem to be missing the point here. Nobody is suggesting that GAP insurance isn't a good idea, just that the prices charged and commissions are taking the piss.
If they're only paying out 6% of premiums in claims then they are indeed taking the piss, and your £300 GAP insurance should have been more like £50.
If they're only paying out 6% of premiums in claims then they are indeed taking the piss, and your £300 GAP insurance should have been more like £50.
Mine didn't pay out when my bike was written off as I'd missed it had to be insured fully comp and was instead only insured TPFT. Still to this day no idea why that makes any difference (apart from the obvious of they wouldn't pay anything if it was your fault) but there you go.
That said...the difference between TPFT and Fully Comp at the time was probably more than I'd have got back anyway (about £1.5k) so a waste of money all round.
That said...the difference between TPFT and Fully Comp at the time was probably more than I'd have got back anyway (about £1.5k) so a waste of money all round.
Mr Tidy said:
TwigtheWonderkid said:
Why is it a nonsense concept? If, due to depreciation, you have a car that could be worth less than you owe on it on a finance agreement, why is it nonsense to want to insure the difference. Otherwise, you might end up with no car and still be owing £5K on it.
Secondly, most people have new for old cover on their house insurance. People seem quite happy to pay extra to not have to worry about depreciation. Most people don't want enough money to buy a 5 year old sofa if their own 5 yr old sofa is damaged. They want enough insurance money to go and buy a new one.
Some people feel the same about cars. They don't want to sit in a car, not knowing who owned it before and what they got up to in it. They want a new car. Return to invoice gap allows them to do that, pretty much. Why is that a nonsense. Seems pretty sensible to me if 2nd hand cars aren't for you.
It's unrealistic - cars depreciate, that's the real world. If you can't afford to face that how are you going to buy your next car?Secondly, most people have new for old cover on their house insurance. People seem quite happy to pay extra to not have to worry about depreciation. Most people don't want enough money to buy a 5 year old sofa if their own 5 yr old sofa is damaged. They want enough insurance money to go and buy a new one.
Some people feel the same about cars. They don't want to sit in a car, not knowing who owned it before and what they got up to in it. They want a new car. Return to invoice gap allows them to do that, pretty much. Why is that a nonsense. Seems pretty sensible to me if 2nd hand cars aren't for you.
Just wondering, but do you know of any household insurer that doesn't provide New for Old cover? Even if that is a different topic altogether.
Return To Invoice GAP cover won't buy a new car anyway because prices will have gone up!
Write the car off and your insurer offers you trade value (Thats another separate issue) of 40k - i'tll cost you 10k extra just to put yourself back into a pre-accident position. GAP covers that bit from trade value to current retail - though it really should be the job of the insurer to do that...
Mr Tidy said:
TwigtheWonderkid said:
Why is it a nonsense concept? If, due to depreciation, you have a car that could be worth less than you owe on it on a finance agreement, why is it nonsense to want to insure the difference. Otherwise, you might end up with no car and still be owing £5K on it.
Secondly, most people have new for old cover on their house insurance. People seem quite happy to pay extra to not have to worry about depreciation. Most people don't want enough money to buy a 5 year old sofa if their own 5 yr old sofa is damaged. They want enough insurance money to go and buy a new one.
Some people feel the same about cars. They don't want to sit in a car, not knowing who owned it before and what they got up to in it. They want a new car. Return to invoice gap allows them to do that, pretty much. Why is that a nonsense. Seems pretty sensible to me if 2nd hand cars aren't for you.
It's unrealistic - cars depreciate, that's the real world. If you can't afford to face that how are you going to buy your next car?Secondly, most people have new for old cover on their house insurance. People seem quite happy to pay extra to not have to worry about depreciation. Most people don't want enough money to buy a 5 year old sofa if their own 5 yr old sofa is damaged. They want enough insurance money to go and buy a new one.
Some people feel the same about cars. They don't want to sit in a car, not knowing who owned it before and what they got up to in it. They want a new car. Return to invoice gap allows them to do that, pretty much. Why is that a nonsense. Seems pretty sensible to me if 2nd hand cars aren't for you.
Just wondering, but do you know of any household insurer that doesn't provide New for Old cover? Even if that is a different topic altogether.
Return To Invoice GAP cover won't buy a new car anyway because prices will have gone up!
2. Many insurers used to offer indemnity cover instead of new for old. Not so many now, because of lack of demand. People want new for old, which is nothing more than build in gap cover, under a different name.
3. Prices may have gone up, or may not have. Many RTI gap policies will actually pay for a new car if it has gone up.
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