Gap ins vs 'valuations' vs real cost to replace.
Discussion
I recently bought a BMW 335d for £28,000 cash.
Looking around for almost a month, and even now, for the spec that price was hard to beat.
At pickup the insurer (more than) said DVLA valuation they used was £23.5 ish.
We said invoice was £28 and they adjusted (about £40 extra for year)
I'm happy that in 6 months the car will be worth less, and in a total loss event I'll get less money than I paid.
I don't really want a RTI settlement. I just want to be able to go buy a similar car, like for like. Options, mileage, age etc.
It's very clear if that happened tomorrow I'd need about £28,000 again, not £23,500.
So what's the story with the insurer valuation?
Are insurers now thinking everyone is on credit and buying Gap so they take the pee with valuations?
Is there still writing (need to find the fine print online for the wife's policy as it's an online one) and FCA legislation that means insurance is 'like for like' unless specifically stated?
Am I best buying some GAp for RTI to save headaches, and then reducing the ins premium?
The cost to get the invoice value with insurer is about as much as gap, but I know the gap insurer would just settle to invoice whereas the insurer won't.
I'll admit I'm confused.
I can go read all the fine print but would like 'real life' experiences of total losses too!
The last I read a decade ago was just providing adverts to insurers as proof of cost to replace like for like, so is that still a thing?
Looking around for almost a month, and even now, for the spec that price was hard to beat.
At pickup the insurer (more than) said DVLA valuation they used was £23.5 ish.
We said invoice was £28 and they adjusted (about £40 extra for year)
I'm happy that in 6 months the car will be worth less, and in a total loss event I'll get less money than I paid.
I don't really want a RTI settlement. I just want to be able to go buy a similar car, like for like. Options, mileage, age etc.
It's very clear if that happened tomorrow I'd need about £28,000 again, not £23,500.
So what's the story with the insurer valuation?
Are insurers now thinking everyone is on credit and buying Gap so they take the pee with valuations?
Is there still writing (need to find the fine print online for the wife's policy as it's an online one) and FCA legislation that means insurance is 'like for like' unless specifically stated?
Am I best buying some GAp for RTI to save headaches, and then reducing the ins premium?
The cost to get the invoice value with insurer is about as much as gap, but I know the gap insurer would just settle to invoice whereas the insurer won't.
I'll admit I'm confused.
I can go read all the fine print but would like 'real life' experiences of total losses too!
The last I read a decade ago was just providing adverts to insurers as proof of cost to replace like for like, so is that still a thing?
I had a biggie 5 years ago that wrote off my 335d Touring (not my fault)
Aviva, my insurers offered me a low settlement but after negotiations on the phone, I got a figure that was £500 lower than I paid for the car 10 months earlier. I had to work quite hard to get that but I was satisfied.
I then went out and bought a newer one which cost me even more money - as you do.
GAP would have made the whole thing less painless assuming GAP does what they advertise.
Although I consider Insurance Companies akin to Dick Turpin, the £100 odd spent on 4 years GAP on my new 440i gives some peace of mind if the unthinkable happens again. It is, after all, only a top up insurance and the risks should be pretty good as new cars are better looked after than older ones, are more secure (generally).
Aviva, my insurers offered me a low settlement but after negotiations on the phone, I got a figure that was £500 lower than I paid for the car 10 months earlier. I had to work quite hard to get that but I was satisfied.
I then went out and bought a newer one which cost me even more money - as you do.
GAP would have made the whole thing less painless assuming GAP does what they advertise.
Although I consider Insurance Companies akin to Dick Turpin, the £100 odd spent on 4 years GAP on my new 440i gives some peace of mind if the unthinkable happens again. It is, after all, only a top up insurance and the risks should be pretty good as new cars are better looked after than older ones, are more secure (generally).
Smuler said:
I went for back to invoice insurance with ALA in 2014 on a 19k 335i
8. Week’s into ownership I hit a rock and it was close to being written off cos of new DCT in particular.
The BTI (GAP in essence) only cost about 120£ so well worth it for peace of mind
Although you'd likely have had a new car anyway as it was under 12mo. Most insurance policies will offer a new replacement if the vehicle is under 12mo. Essentially makes GAP insurance pointless for the first 12mo.8. Week’s into ownership I hit a rock and it was close to being written off cos of new DCT in particular.
The BTI (GAP in essence) only cost about 120£ so well worth it for peace of mind
Swervin_Mervin said:
Although you'd likely have had a new car anyway as it was under 12mo. Most insurance policies will offer a new replacement if the vehicle is under 12mo. Essentially makes GAP insurance pointless for the first 12mo.
Sorry , if it wasn’t clear ; Car was 5 year old a 2009 335i We've had the car a month now but I assume I can still buy a policy based on RTI?
Any recommendations?
I saw gapinsurance.co.uk were a good price and still reasonably well regarded.
Just curious now though if the main insurer 'values' the car well under market price (as More Than did), will the GAP insurer now have issues with the car being technically under insured?
Kinda feels like double insurance and shared liability with GAP... with the main insurer being more inclined to under-value and/or write off a car?
Reading all the fine print is going to be tiring!
Any recommendations?
I saw gapinsurance.co.uk were a good price and still reasonably well regarded.
Just curious now though if the main insurer 'values' the car well under market price (as More Than did), will the GAP insurer now have issues with the car being technically under insured?
Kinda feels like double insurance and shared liability with GAP... with the main insurer being more inclined to under-value and/or write off a car?
Reading all the fine print is going to be tiring!
Mr Whippy said:
We've had the car a month now but I assume I can still buy a policy based on RTI?
Any recommendations?
I saw gapinsurance.co.uk were a good price and still reasonably well regarded.
Just curious now though if the main insurer 'values' the car well under market price (as More Than did), will the GAP insurer now have issues with the car being technically under insured?
Kinda feels like double insurance and shared liability with GAP... with the main insurer being more inclined to under-value and/or write off a car?
Reading all the fine print is going to be tiring!
I was with LV when the 335i hit a rock, their terms clearly laid out in policy document was something like if 60% of the value of the car is the repair cost then it could be deemed a total loss.Any recommendations?
I saw gapinsurance.co.uk were a good price and still reasonably well regarded.
Just curious now though if the main insurer 'values' the car well under market price (as More Than did), will the GAP insurer now have issues with the car being technically under insured?
Kinda feels like double insurance and shared liability with GAP... with the main insurer being more inclined to under-value and/or write off a car?
Reading all the fine print is going to be tiring!
Their other terms said market value of the car was what they would pay in the event of such a total loss.
Original repair quote from BMW (my preferred repairer, not LVs) was 12,000£ which would likely have reached that threshold.
However, as LV negotiated a discount the final price from BMW was nearer 10,500£ which didn't reach threshold, so LV paid out, less my excess.
LV did not know I had GAP with ALA. They don't need to, so it can never be an influence.
The GAP company will likely have terms such as don't accept a settlement offer, without referring to them first. They will naturally want to make sure the gap they pay is minimal and it seems insurance companies with lowball a first offer. But it didn't feel complicated. ALA only wanted to know what I paid for the car, not what an insurance company thought it might be worth.
I got the insurance pretty much the same time as I bought car, but don't believe that's essential.
I sold the car within the 3 year term and they even gave me a pro rata refund
Ah that's all fantastic feedback, thank you for explaining how it worked in your case!
The only outstanding concern is the main insurers view of market value... that is a bit ambiguous vs market price perhaps.
WBAC 'value' it at £23, so do DVLA, and the market accepts that at trade in...
BMW 'price' them at £28 and the market pays it.
They're both market dictated, but the former is little value if you're wanting a like for like replacement.
The only outstanding concern is the main insurers view of market value... that is a bit ambiguous vs market price perhaps.
WBAC 'value' it at £23, so do DVLA, and the market accepts that at trade in...
BMW 'price' them at £28 and the market pays it.
They're both market dictated, but the former is little value if you're wanting a like for like replacement.
Mr Whippy said:
Ah that's all fantastic feedback, thank you for explaining how it worked in your case!
The only outstanding concern is the main insurers view of market value... that is a bit ambiguous vs market price perhaps.
WBAC 'value' it at £23, so do DVLA, and the market accepts that at trade in...
BMW 'price' them at £28 and the market pays it.
They're both market dictated, but the former is little value if you're wanting a like for like replacement.
You’d maybe prefer this GAP Product. The only outstanding concern is the main insurers view of market value... that is a bit ambiguous vs market price perhaps.
WBAC 'value' it at £23, so do DVLA, and the market accepts that at trade in...
BMW 'price' them at £28 and the market pays it.
They're both market dictated, but the former is little value if you're wanting a like for like replacement.
It rang a bell so I cut and pasted link. I assume it didn’t appeal to me because of the age of my car.
https://www.ala.co.uk/gap-insurance/vehicle-replac...
Thanks for the link.
The main concern was just making sure I can replace like for like.
Technically the main insurer offers that.
The issue is the cost over 3yrs to get the value to what we'd have to pay, vs their 'valuation' costs as much as GAP RTI which is superior.
Which is why I'm baffled as our insurer could just buy GAP itself and offer amazing pay outs.
Maybe our £40 higher premium is essentially that?!
Time to go online and find/dig through the small print and actually see what all their terms and covers actually are.
And/or ring them and ask for links etc.
I'll report back if their answer is in any way shape or form that 'normal' insurance doesn't actually cover like for like, as that's what is causing me so much confusion.
The main concern was just making sure I can replace like for like.
Technically the main insurer offers that.
The issue is the cost over 3yrs to get the value to what we'd have to pay, vs their 'valuation' costs as much as GAP RTI which is superior.
Which is why I'm baffled as our insurer could just buy GAP itself and offer amazing pay outs.
Maybe our £40 higher premium is essentially that?!
Time to go online and find/dig through the small print and actually see what all their terms and covers actually are.
And/or ring them and ask for links etc.
I'll report back if their answer is in any way shape or form that 'normal' insurance doesn't actually cover like for like, as that's what is causing me so much confusion.
Our X5 got stolen a couple of years ago.
Insurer said "we'll pay you £X"
I said "but that's lower than the trade value"
Insurer said, "no, that is a fair trade value"
I said "wait, the policy says you need to pay retail value"
Insurer said "oh, silly us, we forgot what our own policy said. We'll pay you £Y"
I said "there are 14 cars on Auto Trader of same model, age, spec, mileage. The average price of those is £Z"
Insurer said "we'll pay you £Z less £2000"
I said "are you intending to not comply with the terms of our contract? Let me know so I can tell the Financial Ombudsman how you operate"
Insurer said "we'll pay you £Z".
£Z was more than £6K more than £X.
Watch out for insurers, they will try to rip you off at every turn. They have a 'playbook' and offering you a trade value "by mistake" etc. is all part of their routine. Stick to your guns, accept no nonsense, make it clear you know what you're entitled to, don't give up.
John
Insurer said "we'll pay you £X"
I said "but that's lower than the trade value"
Insurer said, "no, that is a fair trade value"
I said "wait, the policy says you need to pay retail value"
Insurer said "oh, silly us, we forgot what our own policy said. We'll pay you £Y"
I said "there are 14 cars on Auto Trader of same model, age, spec, mileage. The average price of those is £Z"
Insurer said "we'll pay you £Z less £2000"
I said "are you intending to not comply with the terms of our contract? Let me know so I can tell the Financial Ombudsman how you operate"
Insurer said "we'll pay you £Z".
£Z was more than £6K more than £X.
Watch out for insurers, they will try to rip you off at every turn. They have a 'playbook' and offering you a trade value "by mistake" etc. is all part of their routine. Stick to your guns, accept no nonsense, make it clear you know what you're entitled to, don't give up.
John
I got conned into taking "Gap" insurance in 2005 - but didn't waste my money in 2008!
It seems to be "depreciation cover" - so if you've paid for it get over it! Newish cars do depreciate FFS!
And if you haven't paid for the car, you couldn't afford it in the first place so what's the problem?
It seems to be "depreciation cover" - so if you've paid for it get over it! Newish cars do depreciate FFS!
And if you haven't paid for the car, you couldn't afford it in the first place so what's the problem?
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