Insurance shortfall - GAP monopoly

[StuartFZR400 0]

GAP insurance

 

I’ve had it explained to me about GAP insurance, and it all seems unfair. I was told that if your car is written off, then if you had GAP insurance, it will pay the difference between the Write Off Pay Out and the purchase replacement cost of buying a similar car. This surely therefore means that they know insurance companies will pay out less than what a cars value truly is. How can this be fair?

 

For me to have GAP, I must have bought it from a franchise dealer (inflated price) and pay this GAP premium. Both of which I felt I should not afford. Seems to me now, that it should be something you do automatically when insuring a car you cannot afford to loose.

 

If GAP is something only the franchise offer, and not your own insurance company like Elephant, then it seems almost like a monopoly.

 

The story unfolds thus. I was hit from behind by another car. They admit 100 percent fault. However the independent service acting upon my behalf is stating my car is worth less than what I know it to be worth (know – ie seen many examples on Auto Trader and also seen Glasses).

 

How do you bridge the shortfall without GAP?

 

Or how can you bump up the original valuation of the pre-crash car to a fair price?

 

I feel so strongly about it, that I want this company to go buy me a car with their offer amount. I bet they cannot replace like-for-like with their offer.

[Yandards 0]

Just keep arguing, send them ads for similiar condition cars etc.

 

Insurance is like an inverse double glazing salesman, some guy comes in and offers to do your whole house for £20k and some muppets will take it, although they will probably go as low as £2.5k. If 1 in 10 people take the lowest insurance offer then they are quids in.

 

You are entitled via the joy of law to a replacement vehicle of an equivelent specification, you just need to argue to get more money out of them, even a car which has classic value (and they will argue you need a classic policy to cover that) is a pile of crud as car values tend to reflect condition regardless of any other factors. For example if you had a low mileage corrado you would expect to pay a premium for it, they are obligated to provide you with the cash to do that.

[Andy665 0]

Seems there is a little confusion here about GAP and the way the product and insurance markets work.

 

There are basically two types of GAP cover:

 

1. Finance shortfall - this will pay out the difference between what your insurer is prepared to give you and what you owe on finance - we all know that cars will devalue more quickly than a finance balance reduces

 

2. Return to Invoice GAP - slightly more expensive than the above but it will pay you out exactly what you paid for your car (less RFL) in the event of it being regarded as a total loss - this in effect makes your car depreciation proof (but not inflation proof) for the term of the GAP policy. E.g You pay £10k for a car. Two years down the line its written off. The market value of the car is now £7k, the insurer offers you £6k - you can accept this offer knowing that the GAP policy will pay you another £4k, giving you back your original £10k

 

What GAP policies provide you with is peace of mind - also means you can accept your insurers first offer as you know the difference will be paid out by the GAP policy

 

Motor insurers could offer GAP, it has surprised me that no one has jumped on the bandwagon but its certainly a very good value product if you buy it from an on-line supplier like www.click4gap.co.uk

[Josh Waddi 0]

Unfortunatly i work in motor insurance and come across this quite often, yes GAP insurance is a con and even the GAP insurers don't pay the full retail price they swindle the way out of it which means if you have a vehicle on finance you will lose out.

 

As for getting the right price for your car you must prove to them (insurer) what the vehicle is worth and the at fault insurer must put you back in the same financial position. If is car is being sold a lot less than what is worth they can use this as evidence against you. your best bet is to look at the lower values of a similar spec and if what there offering isnt enough for that vehicle then show them your evidence. You need to put up a fight.

[Andy665 0]

yes GAP insurance is a con and even the GAP insurers don't pay the full retail price they swindle the way out of it which means if you have a vehicle on finance you will lose out.

 

With the greatest of respect the above statement is total and utter rubbish. Every GAP policy Terms and Conditions I have seen are so watertight in the consumers favour that there is no way they can "swindle their way out of it".

 

On Return to Invoice GAP it is simple - you pay £15k for the car (less Road Fund Licence), insurer pays out £10k in event of a total loss (market value) and GAP insurer pays out £5k to return customer back to £15k

 

On Finance Shortfall GAP it is equally simple - you owe £8k on the finance agreement, insurer pays out market value - £6k, GAP policy pays out £2k to cover the outstanding money owed on the finance agreement

 

Seems to me that StuartFZR400 has a justifiable grievance against his insurer - they should pay market value in the event of a total loss, GAP has never been a product to make sure the customer gets market value for their vehicle - it goes way beyond that (to the customers advantage)

[StuartFZR400 0]

Thanks guys - a fountain as always