Dear all

Looking for some advice on how to deal with my Gap insurance company who refuses to settle my claim.

My car was recently stolen. I purchased a GAP insurance from the dealer Cargiant at the same time I bought the car and the GAP insurance provider was AA Warranty, part of Motorway Direct group of company.

My claim has been processed by my motor insurance but the GAP insurance is now refusing to reimburse the difference between what the motor insurance has paid and the invoice price.

Their argument is as follows:

- AA Warranty will pay the difference between purchase price (car bought in September 2010 for £14000) and market value of vehicle at point of loss (car stolen in June 2011)

- Market value is defined as Glass Guide Retail value or insurer settlement price whichever is higher

- Insurer settlement is £13000 which I have accepted

- According to AA Warranty, Glass retail value at point of loss is £16000

- Therefore, as market value at loss is above invoice price, there would be no settlement

I have replied to them contesting their line of argument:

- Salesperson from Cargiant was clear when he sold the insurance: GAP will pay difference between insurer settlement and purchase price. Therefore, I must be reimbursed £14000-13000 = £1000 by AA Warranty

- Also seems like there are virtually no conditions under which the GAP insurance would have to settle under their terms as Cargiant is selling car at rock bottom price with market value at loss likely to remain higher than purchase price for the whole duration of the insurance contract - case in point: the car I purchased 9 month ago is valued today at £16000, which is still 16% higher than the purchase price

- Therefore, I think I have been misold a product unfit for my purpose

I have email them and copied Cargiant asking them to settle or I will name both company liable to the FOB

Have not heard back from AAWarranty for the past 10 days and unsure what should be my next course of action.

I think I need to wait 8 weeks prior to referring the case to the FOB but given they are not even acknowledging my complaint, if there another approach I should use?

Thanks for your help

Oliver

I think you need to probe the information a bit more.

The glasses guide value of £16k is based on what ? Check to see what assumptions this valuation is based on. If £16k is correct, why have you accepted Insurers settlement of £13k. Insurance policies cover the market value of the car and they would have looked at glasses guide. So why do they think the car is worth £3k less than the market value?

I can see this from the GAP providers point of view. They appear to have been prejudiced by the acceptance of a below market value Insurance settlement.

Once you know whether £16k is a fair market value, I would suggest that you re-open the Insurance claim and see whether you can get the GAP and Car Insurers to have contact with each other to resolve with your permission. Perhaps the solution is that they both pay you £500, so you then have a total of the £14k you have paid for the car.

Thank you for your reply

I find iy difficult to get a higher settlement value from my motor insurane company given the purchase price for the car was 14000 so 13000 did seem fair to me after having onwed the car for 10 months

And that is exactly why I believe the Gap insurance sold by Cargiant is unfit as the purchase price from such as car supermaket will always almost be below market value

I might follow your suggestion on probing them on the 16000 value but am also deeply upset that they wont even acknowledge my complaint

Any other suggestions?

Thanks

I think you need to probe the information a bit more.

 

The glasses guide value of £16k is based on what ? Check to see what assumptions this valuation is based on. If £16k is correct, why have you accepted Insurers settlement of £13k. Insurance policies cover the market value of the car and they would have looked at glasses guide. So why do they think the car is worth £3k less than the market value?

 

I can see this from the GAP providers point of view. They appear to have been prejudiced by the acceptance of a below market value Insurance settlement.

 

Once you know whether £16k is a fair market value, I would suggest that you re-open the Insurance claim and see whether you can get the GAP and Car Insurers to have contact with each other to resolve with your permission. Perhaps the solution is that they both pay you £500, so you then have a total of the £14k you have paid for the car.

Thank you for your reply

 

I find iy difficult to get a higher settlement value from my motor insurane company given the purchase price for the car was 14000 so 13000 did seem fair to me after having onwed the car for 10 months

 

And that is exactly why I believe the Gap insurance sold by Cargiant is unfit as the purchase price from such as car supermaket will always almost be below market value

 

I might follow your suggestion on probing them on the 16000 value but am also deeply upset that they wont even acknowledge my complaint

 

Any other suggestions?

 

Thanks

You have got to be pragmatic about this and look to resolve it in the easiest way. All Insurance companies have to follow the FSA complaints guidelines. Which is basically to acknowledge receipt within 2 days, come back with a further response within 20 days, issue a final response within 8 weeks and provide the policyholder with full details of the complaints process including details of the FOS process. BUT the FOS could take up to 2 years to decide on your complaint.

Take the advice. Probe the £16k market value, talk to your Car Insurers about this asking them to look into this. See if you can get the GAP and the Car Insurers to discuss this to resolve. Compromise would be for both of them to pay £500, so you are happy. They might be able to agree to this quite quickly, if you can persuade them.

Sorry it is my first reply but i saw your question and had to respond.

When you said you have accepted your insurance companies offer did you mean you have banked their payment ? This can make a big difference. I worked in the motor insdustry for 20 years and have specialised in insurance for the last 5 years and now work at a high level within an insurance company.

You have to understand that both the dealership and the gap insurance company and your own motor insurance comapny will not want the FSA involved . This costs them lots and lots in both time and money. Your insurance company have offered you below market value and before you do anything you have to speak to them and ask them to explain their rational behind their offer.

At this point providing you have not banked their payment they should increase their offer.

In this case it is not the dealership or the gap insurance companies fault but your own insurance company ( providing the figures you have been given are factually correct). You might want to read a the FSA treating customers fairly report. It smy first post so I can not put a link in but type it into google. What this means is that they have to treat you in an open and fair way. In fact the FSA take a very dim view of any company who dose not.

It is will be difficult to prove exactly what the dealership said to you as I am sure they will have covered themselves with disclaimers etc.

Let me know how you get on.

Most important do not bank the payment!

 

Most important do not bank the payment!

Good advice. I would hope the Insurers would still be willing to look again, even if the payment had been banked. I am sure the Insurers would not want the OP to make a complaint about the way the claim was handled, which might then end up at the FOS.

Thanks for the advice

I have actually not banked the £13,000 payment from the motor insurance company so am going to contact them and refer them to the letter from the Gap insurance company outlining the £16,000 valuation for the car

Good advice. I would hope the Insurers would still be willing to look again, even if the payment had been banked. I am sure the Insurers would not want the OP to make a complaint about the way the claim was handled, which might then end up at the FOS.

Thanks for the advice

 

I have actually not banked the £13,000 payment from the motor insurance company so am going to contact them and refer them to the letter from the Gap insurance company outlining the £16,000 valuation for the car

Yes that is a sensible way forward.

I think you need to probe the information a bit more.

 

The glasses guide value of £16k is based on what ? Check to see what assumptions this valuation is based on. If £16k is correct, why have you accepted Insurers settlement of £13k. Insurance policies cover the market value of the car and they would have looked at glasses guide. So why do they think the car is worth £3k less than the market value?

 

I can see this from the GAP providers point of view. They appear to have been prejudiced by the acceptance of a below market value Insurance settlement.

 

Once you know whether £16k is a fair market value, I would suggest that you re-open the Insurance claim and see whether you can get the GAP and Car Insurers to have contact with each other to resolve with your permission. Perhaps the solution is that they both pay you £500, so you then have a total of the £14k you have paid for the car.

Sorry I have been away on business then family holiday so what has happened so far have your insurance company taken another look?

Sorry I have been away on business then family holiday so what has happened so far have your insurance company taken another look?

Hello, I need an advice please......I recently had an accident which wasn't my fault...my insurance company is writing my car off nd offering me 2300pounds. I hav gap insurance as well nd dey r offering a glass guide value of 3200. I bought d car for 3999. The gap insurer wants me to challenge my insurance's offer in order for an increased offer better dan d 2300 bin offered. Dunno if I shld just accept d gap offer or not

Your GAP Insurers are saying that the car has a current market value of £3200 and you need to speak to your Car Insurers to dispute their valuation of £2300.

Check the value of your car using the guides such as Parkers or Glass.co.uk and then speak to your Car Insurers. See whether they will increase their payment from £2300 or if they won't what information they need to assess a higher valuation.

Your GAP Insurers are saying that the car has a current market value of £3200 and you need to speak to your Car Insurers to dispute their valuation of £2300.

 

Check the value of your car using the guides such as Parkers or Glass.co.uk and then speak to your Car Insurers. See whether they will increase their payment from £2300 or if they won't what information they need to assess a higher valuation.

Hi

I had a similar case. We all know that no one will want to pay more. This is actually another advantage to have GAP, you are not accepting the insurer's undervalued figure, so GAP is pushing you to get more from actual insurer.

Anyway the best solution is to tell your insurer about the GAP and their expected value. This is not going to harm you at all. Most of the time they will accept that value straight away.

Good luck

Totally agree.

The Gap insurance company just like your own insurance company wants to make sure that each side is paying their share.

In either case that is for the insurance companies to mess around with as long as you are not out of pocket.