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  • FIRST POST
    • ewen1605
    • By ewen1605 12th Jul 17, 10:32 PM
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    ewen1605
    GAP Insurance (Vehicle Replacement) query
    • #1
    • 12th Jul 17, 10:32 PM
    GAP Insurance (Vehicle Replacement) query 12th Jul 17 at 10:32 PM
    Hello, I'm hoping someone might be more learned in this area than I am.

    I purchased a car in 2016 on PCP finance.
    The list price was £21,000.
    Minus the dealer's offer the cash price was £17,000.
    I paid a £1200 deposit and monthly payments thereafter.

    I also purchased Total Loss Protection (Vehicle Replacement) which says that it will cover the greater of either the finance settlement or the cost of a like-for-like new replacement vehicle.

    The car was stolen last week, so I have had to claim on my insurance.

    The finance settlement is £13,000.
    The car has been valued at £15,000.
    Minus my outstanding premium (was paying monthly) and insurance excess this means my finance will be paid off and I will get a £1,000 cheque from the car insurer.

    Now my question is what can I expect from my GAP cover?
    There are no details in the policy document about how they actually go about calculating the cost of a new vehicle. The only thing I can see is from a claim document they sent me yesterday which is that I need to provide my original invoice so they can "request a quote from the dealership you bought the car from".

    Does this mean they get a quote for the list price of a new vehicle. That's around £21,000 - so should I expect a payment of £6,000 to cover the difference?

    Or do you think they will get a quote like a customer would, minus any dealership offers, which would probably peg the car at around £17,000? In which case would I get a payment of £2,000?

    The problem in my eyes of the second scenario is that offers change and one month they might have deep discounts on this particular model of vehicle, and the next the price increases and I'm left out of pocket when buying a new car.

    Does anyone think they can shed any light on this?
    Last edited by ewen1605; 12-07-2017 at 10:34 PM.
Page 1
    • daveyjp
    • By daveyjp 12th Jul 17, 10:41 PM
    • 6,969 Posts
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    daveyjp
    • #2
    • 12th Jul 17, 10:41 PM
    • #2
    • 12th Jul 17, 10:41 PM
    You state cost for a like for like replacement, if its £21k and the dealer is offering a discount the replacement cost is the discounted price.

    Depending on the attitude of the insurer and Gap company it can take months to sort out the final figures, in the meantime you have no car.
    • lostinheaven
    • By lostinheaven 13th Jul 17, 9:30 AM
    • 138 Posts
    • 69 Thanks
    lostinheaven
    • #3
    • 13th Jul 17, 9:30 AM
    • #3
    • 13th Jul 17, 9:30 AM
    Hello, I'm hoping someone might be more learned in this area than I am.

    I purchased a car in 2016 on PCP finance.
    The list price was £21,000.
    Minus the dealer's offer the cash price was £17,000.
    I paid a £1200 deposit and monthly payments thereafter.

    I also purchased Total Loss Protection (Vehicle Replacement) which says that it will cover the greater of either the finance settlement or the cost of a like-for-like new replacement vehicle.

    The car was stolen last week, so I have had to claim on my insurance.

    The finance settlement is £13,000.
    The car has been valued at £15,000.
    Minus my outstanding premium (was paying monthly) and insurance excess this means my finance will be paid off and I will get a £1,000 cheque from the car insurer.

    Now my question is what can I expect from my GAP cover?
    There are no details in the policy document about how they actually go about calculating the cost of a new vehicle. The only thing I can see is from a claim document they sent me yesterday which is that I need to provide my original invoice so they can "request a quote from the dealership you bought the car from".

    Does this mean they get a quote for the list price of a new vehicle. That's around £21,000 - so should I expect a payment of £6,000 to cover the difference?

    Or do you think they will get a quote like a customer would, minus any dealership offers, which would probably peg the car at around £17,000? In which case would I get a payment of £2,000?

    The problem in my eyes of the second scenario is that offers change and one month they might have deep discounts on this particular model of vehicle, and the next the price increases and I'm left out of pocket when buying a new car.

    Does anyone think they can shed any light on this?
    Originally posted by ewen1605
    All of this very much depends on the specific terms and conditions of your policy. It also depends on whether your GAP insurance terms dictate that the GAP insurer is to physically source your next vehicle, pay a credit to a nominated dealer, or pay out in cash directly to yourself however, as a general rule, assuming it's a policy that pays out in cash, I would expect the worst case scenario to be that the GAP insurance company would acquire quotations from a number of dealerships and then calculate their payout based on the lowest price they receive for today's nearest equivalent to the vehicle make, model, specification, age and mileage to that of the vehicle you originally purchased.

    You say that the vehicle has been "valued at £15,000"... by whom? E.g. if your Motor Insurer has deemed the value of the vehicle as £15,000 do you know firstly, how this compares to what Glass' Guide state that your vehicle was worth at the time of loss and leading on from that, whether there's a Market Value clause within your GAP insurance policy?

    E.g. If the motor insurer declare the value as £15,000 but Glass' Guide deem the vehicle to be worth say, £17,000... if your GAP policy includes a Market Value clause you might find that the GAP insurer is only prepared to pay the difference between £17,000 and the current replacement price (e.g. that they won't cover the amount by which they'd view your Motor Insurer to have underpaid),

    On this very topic, it's therefore normally crucial that you DO NOT accept any offer from your Motor Insurer without first seeking the approval of the GAP insurance claim administrator.

    If you bought your GAP insurance policy from the motor dealer you bought the car from, it's quite likely that such a Market Value clause exists. If you bought your policy from one of the online providers, you'll likely find that there isn't one... which leads me to this...

    Depending on the attitude of the insurer and Gap company it can take months to sort out the final figures, in the meantime you have no car.
    Originally posted by daveyjp
    This very much depends on whether there is a Market Value clause and if there is, whether your Motor Insurer is willing to have the GAP insurance claim administrator negotiate settlement directly with them on your behalf - assuming the GAP insurance claim administrator is also willing.

    However again... if your policy does not include such a Market Value clause there'd clearly be no grounds on which they could extend negotiations with your Motor Insurer due to a perceived low payout. In fact, with no Market Value clause and assuming all of the claim paperwork is in order by the time confirmation of your Motor Insurer's final offer is received, the GAP insurance settlement is usually made within a matter of hours/days rather than weeks/months.

    Where did you buy your policy from and can we see the policy wordings? By seeing them we'll be able to give you far more accurate advice as opposed to putting forward hypothetical scenarios.
    • ewen1605
    • By ewen1605 13th Jul 17, 2:04 PM
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    ewen1605
    • #4
    • 13th Jul 17, 2:04 PM
    • #4
    • 13th Jul 17, 2:04 PM
    Great responses, thank you.

    The value of £15,000 is based on the Glass's Guide market valuation. My car insurance (Bell) initially valued the vehicle at £14,200 but my GAP insurer (Premia Solutions, purchased through the dealership) sent the Glass's value to me at £15,000 and told me to use this to make sure I got the right settlement from Bell.

    Bell have now increased the value of the settlement to £15,000 to match the Glass's Guide value.

    When I spoke to Premia Solutions they advised they would pay any GAP settlement by cheque or BACS, or if I wanted it, as a credit note to a dealership.

    I'll upload the policy wordings tonight for you

    Thanks again
    Last edited by ewen1605; 13-07-2017 at 2:07 PM.
    • ewen1605
    • By ewen1605 13th Jul 17, 10:52 PM
    • 5 Posts
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    ewen1605
    • #5
    • 13th Jul 17, 10:52 PM
    • #5
    • 13th Jul 17, 10:52 PM
    Where did you buy your policy from and can we see the policy wordings? By seeing them we'll be able to give you far more accurate advice as opposed to putting forward hypothetical scenarios.
    Originally posted by lostinheaven
    Here is the policy wording from Premia Solutions.
    docdro.id/U6tcEHe

    Thanks for looking and any further advice you have
    • lostinheaven
    • By lostinheaven 13th Jul 17, 10:55 PM
    • 138 Posts
    • 69 Thanks
    lostinheaven
    • #6
    • 13th Jul 17, 10:55 PM
    • #6
    • 13th Jul 17, 10:55 PM
    Can you confirm... you bought the car brand new?

    How old is the car now?
    • lostinheaven
    • By lostinheaven 13th Jul 17, 11:20 PM
    • 138 Posts
    • 69 Thanks
    lostinheaven
    • #7
    • 13th Jul 17, 11:20 PM
    • #7
    • 13th Jul 17, 11:20 PM
    Here is the policy wording from Premia Solutions.
    docdro.id/U6tcEHe

    Thanks for looking and any further advice you have
    Originally posted by ewen1605
    OK so... reviewing your policy terms... these are my observations:

    "What is covered"
    If within the period of insurance and within the territiorial limits an incident occurs which results in the insured vehicle being classed as a total loss by the motor insueance policy underwriter, we will cover the difference between the insured value and the greater of either the cost of a replacement vehicleor the finance settlement. The Benefit shall include up to £250 excess from your motor insurance policy unless it can be recovered from a liable third party.

    Note:
    If your motor insurance policy has a new vehicle provision and you decline the offer of a new vehicle then we will pay the difference bwteen the insured value and the new invoice selling price of the insured vehicle or the finance settlement whichever is the greater and not the cost of a replacment vehicle.
    Relevant definitions:

    Insured Value: means the amount you received under your motor insurance policy in respect of the insured vehicle as a result of a total loss.

    Replacement Vehicle: means a replacemet ew or pre-registred veicle of the same make, model and derivative as the insured vehicle, incuding all factory fitted accessories, but excluding road fund licence, new vehicle registration fee, fuel, paintwork and/or upholstery protection kits, insurance premiums (including this premium), warranty premiums, finance arrears and any such associated costs and any negative equity. If that model is no longer available then the price of the nearest equivalent vehicle will be used.
    Thus... assuming you bought the vehicle brand new, it's either now more than 12 months old or less than 12 months old and you have NOT declined a replacement vehicle from your Motor Insurer, the way I think it reads is that Premier are going to be paying you the difference between the motor insurance payout and the list price of a new equivalent vehicle today LESS the cost of things such as road fund licence and new vehicle registration fee, PLUS (potentially) up to £250 towards any excess that you had to pay to your Motor Insurer as part of your total loss claim.

    I should stress though that it doesn't specifically refer to the "list price" of a new equivalent vehicle, but neither does it specifically exclude it either, in which case, in your position I'd be preparing to argue the point with them if they offered a payout based on any lower figure.

    If you did NOT buy the vehicle brand new, I'd expect them to source quotes for the supply of an equivalent vehicle today from at least three dealerships and then work to the lowest figure that comes back (less RFL etc, plus excess contribution).

    If you DID buy the vehicle brand new and it IS less than 12 months old and you HAVE declined the offer of a new-for-old replacement vehicle from your Motor Insurer, Premier are only going to entertain paying you the difference between the motor insurance payout and the original invoice price you paid after discount (less RFL etc, plus excess contribution).

    HTH
    • BJV
    • By BJV 14th Jul 17, 11:04 AM
    • 2,233 Posts
    • 3,352 Thanks
    BJV
    • #8
    • 14th Jul 17, 11:04 AM
    • #8
    • 14th Jul 17, 11:04 AM
    Ok well gap insurance is like any other insurance in that you can not benefit from making a claim.

    I would think however that like other posts said it would be the physical price you would have to pay so it would not include any national or manufacture deals. e.g if there is a £1000 discount nationwide. etc. You would be paid the price after discounts.
    Happiness, Health and Wealth in that order please!
    • ewen1605
    • By ewen1605 14th Jul 17, 9:50 PM
    • 5 Posts
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    ewen1605
    • #9
    • 14th Jul 17, 9:50 PM
    • #9
    • 14th Jul 17, 9:50 PM
    Can you confirm... you bought the car brand new?

    How old is the car now?
    Originally posted by lostinheaven
    Thank you so much for reading through th policy wording. I'm glad I wasn't the only one who couldn't see anything to reference how they calculate the cost of this replacement vehicle.

    The car is about 17 months old (purchased January 2016) so there was no vehicle replacement offered by Bell when I made the claim.

    Once I have proof of payment from Bell, then Premia Solutions will start to get their quote ready. Like you said, I think it's worth preparing to fight them on their own policy wording to see if I can get them to pay out the list price of an equivalent like for like vehicle.

    Where I think they might get me is where they mention a pre registered vehicle. Again they could be really unfair and find an equivalent pre reg of the same spec and try and pay out based on that cars value.
    • lostinheaven
    • By lostinheaven 14th Jul 17, 10:14 PM
    • 138 Posts
    • 69 Thanks
    lostinheaven
    Thank you so much for reading through th policy wording. I'm glad I wasn't the only one who couldn't see anything to reference how they calculate the cost of this replacement vehicle.

    The car is about 17 months old (purchased January 2016) so there was no vehicle replacement offered by Bell when I made the claim.

    Once I have proof of payment from Bell, then Premia Solutions will start to get their quote ready. Like you said, I think it's worth preparing to fight them on their own policy wording to see if I can get them to pay out the list price of an equivalent like for like vehicle.

    Where I think they might get me is where they mention a pre registered vehicle. Again they could be really unfair and find an equivalent pre reg of the same spec and try and pay out based on that cars value.
    Originally posted by ewen1605
    If you were the first registered keeper of the vehicle that you bought they'd never get away with offering you a pre-registered vehicle as an "equivalent" replacement. I wouldn't worry too much about that.

    It'll come down to whether they're gonna look at the list price of a brand new equivalent or, the best/lowest price from a range of quotes for the supply of a brand new equivalent. I can see both "sides" as being "fair" but if they offer the latter, I reckon there's easily grounds for you to at least attempt to push them to consider the former and ultimately end up with a mid-point settlement of sorts.
    • ewen1605
    • By ewen1605 15th Jul 17, 4:15 PM
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    ewen1605
    I went to my dealership today and they were under the impression they would probably be phoned for a quote.

    The more the money the better, I suppose. I will have to make sure that it includes all the factory-fitted accessories that my car had.

    Because it was a special edition model that they no longer produce, I had black detailing and black alloys (£900 accessory) and front parking sensors that are no longer standard (£400 optional extra) so these are my ammunition to squeeze as much money out of them as possible.

    I'll update and let you know how it goes once they get back to me with a quote.
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