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Svar från GAPinsurance.co.uk

11 juli 2020

Hello Richard.

Thank you for purchasing GAP insurance from us once again... your custom over the last 7 years is very much appreciated. Thank you too for taking the time to leave feedback.

I wanted to take the opportunity to put your comments in to perspective, by explaining how the market has changed since you last bought cover from us... if not for your benefit (I believe Tim who you dealt with may have explained at least some of this to you already) but also for the benefit of other people reading this review of yours. I hope you don't mind.

Looking over your purchase history with us, it looks like the first two policies you had were covering brand new vehicles of which you were the first registered keeper. For those vehicles... you had Replacement GAP insurance which, in the event the vehicles were written off, would have aimed to pay the difference between your motor insurance payout and the *higher of* either:

1. The amount oustanding on finance at the time (if applicable), or
2. The original invoice price you'd paid for the vehicle first time around, or
3. The cost of replacing the vehicle with a brand new equivalent at the time of claim.

More recently, you'd had Replacement GAP insurance again, but this time around on a vehicle for which it doesn't appear you were the first registered keeper (presumably, pre-registered to the dealer?). In that case, if the vehicle had have been written off, the Replacement GAP insurance policy would have been aiming to pay you the difference between your motor insurance payout and the *higher of* either:

1. The amount oustanding on finance at the time (if applicable), or
2. The original invoice price you'd paid for the vehicle first time around, or
3. What it would cost at the time of claim to replace your vehicle with one of the same (or nearest equivalent) make, model, specification, age and mileage as was relevant to your original vehicle at the time you first bought it.

Over the years that you've had cover with us the wider GAP insurance industry (particularly since 2016) has been challenging, with a number of insurers going to the wall (albeit none that we've ever dealt with) and/or intentionally exiting the market (the underwriter of your previous policy with us, stopped accepting new GAP business in January of last year, for example). In response to this, the insurers that remain (and particularly the likes of the A-rated insurers that we deal with) have really tightened their belts in terms of what cover they're prepared to offer.

Price changes aside, one of the biggest changes was that most insurers of GAP insurance have moved (or are moving) to deny Replacement GAP insurance on anything other than a brand new vehicle at first registration. However, despite how it may first appear, that's not to say that the cover itself is specifically inferior to that of an Invoice GAP insurance policy (which is available for "used" (including pre-registered) vehicles).

Of course... there was always the potential for a Replacement GAP insurance to pay out more than an Invoice GAP insurance policy would (it's the main reason Replacement GAP insurance exists), but whilst it's statistically fairly likely that the cost of a brand vehicle at the time of write-off might be higher than the original vehicle was purchased for if it that had been bought brand new... it's much less likely that the same would be true when trying to determine the cost at the time of claim, of replacing the written off vehicle that was purchased used / pre-registered, with another equivalent used / pre-registered vehicle. Thus, in some cases, there was the potential for one to have paid more for a Replacement GAP insurance policy when buying cover, but then ended up at the time of claim with a policy paying out to the same value as the cheaper Invoice GAP insurance policy would have covered.

Add to the above the fact that trying to establish at the time of claim, the cost of a vehicle equivalent to one that was *not* originally purchased brand new (allowing for age, mileage and full original specification etc) was often difficult (in some cases considerably so) and with some regularity would lead to complaints that the claim was being handled based on a vehicle that from one perspective or another, may not have been entirely equivalent.

In short... the claims handling of Replacement GAP insurance covering a used / pre-registered vehicle has historically been notoriously difficult and somewhat emotive. A reasonable number of claims did and (if allowed to continue) would potentially result in a dissatisfactory outcome to one extent or another. Invoice GAP insurance by comparison, is considerably more straightforward.

In response... all things considered... most insurers pulled the plug on offering Replacement GAP insurance on anything other than brand new vehicles at first registration. Granted, claims on such are still not without some occassional difficulty (model changes etc) but, they're much more of a smooth process than Replacement GAP insurance claims on a used / pre-registered vehicle.

I hope this puts things suitably in to perspective for you and explains why this time around, we could offer you Invoice GAP insurance as opposed to Replacement GAP insurance. Of course, if you'd like to discuss further at all, please don't hesitate to contact me.

Thank you once again for your custom. I wish you all the best with your new car.

Sincerely,

David Burns-Keane
Owner
GAPinsurance.co.uk