Gap insurance at fault

ginnyknit

Our car was stolen in March 2009 and written off, but luckily (we thought) we had gap insurance so any shortfall in the vehicles value would be covered. Sadly we were wrong and I am now at my wits end. It took the gap payment company till October to settle up and there was a 1,000 pound shortfall. They agreed we could pay 200 pounds and mentioned 10 pounds per month, ok we thought. No wrong again, that was an offer that runs out next week and goes upto 500 pounds for a month, if thats not paid they want a grand - in 10 pound instalments - yay! I am now so far down I don't know which way to turn, we were really struggling as my husband is severely disabled and the last 12 months have been horrendous since I gave up work to care for him. All we need is 200 pounds and can't get it by any means. Things were tough but now I am at the ned of my tether.

Ian_W

I'm sorry, I don't know whether I am being particularly thick - but I really can't understand what your problem is? I don't mean that in the sense that you don't have a problem, just that as written I can't understand what it is!

Can you try to explain it again more clearly?

mcjordi

me either ian

ginnyknit

Sorry guys, there was a shortfall when we paid off the car loan using the insurance money and gap insurance money, which leaves us in debt. We thought we had an agreement to pay 200 pounds in instalments but actually that was an offer which runs out next week, to pay in full. If we do not pay it it goes up to 500 for a month then if we don't pay that its 1000 which can be paid in instalments for 10 years. This originally was a goodwill payment as it was the gap companies fault that it took them 7 months to pay up. So as we have no cash we cannot clear this debt and will be left with the 10 ponds a month to pay for years. Hope that makes sense. thanks

irn_bru

Still confused! So the gap insurance company paid out, albeit late and you used the money along with your conventional insurance pay out to settle the loan on the car and yet somehow there was a shortfall? How can this be? Did you somehow owe more than you originally paid for the car.

As to how you get hold of £200 at short notice, I'm afraid only you can answer that one. Hope it all works out for for you

dacouch

irn_bru wrote: »

Still confused! So the gap insurance company paid out, albeit late and you used the money along with your conventional insurance pay out to settle the loan on the car and yet somehow there was a shortfall? How can this be? Did you somehow owe more than you originally paid for the car.

As to how you get hold of £200 at short notice, I'm afraid only you can answer that one. Hope it all works out for for you

With GAP Insurance there can sometimes be a shortfall in what you receive from the GAP company and what you owe. This can be because they generally cover a certain amount of shortfall eg £5000 on an average family car. The other main reason is where the GAP Insurer feel the vehicle Insurer under valued the car and paid out too little. The GAP Insurer will then pay the difference between what they calculate the value of the car and what is owed on the finance.

Ian_W

dacouch wrote: »

With GAP Insurance there can sometimes be a shortfall in what you receive from the GAP company and what you owe. This can be because they generally cover a certain amount of shortfall eg £5000 on an average family car. The other main reason is where the GAP Insurer feel the vehicle Insurer under valued the car and paid out too little. The GAP Insurer will then pay the difference between what they calculate the value of the car and what is owed on the finance.

If it is a fixed amount, it's fixed at the time of purchase and I wouldn't have thought there is anything the OP can do about it. They got what they paid for - it just wasn't enough!

If it is a dispute between the car and GAP insurers over the vehicle valuation I wouldn't have thought the Ombudsman would consider it fair that the consumer loses out - I don't know that for sure but I would be surprised. In which case complaints to both co's and a trip to the FOS might help resolve it I would have thought?

Another thing springs to mind - does the shortfall relate to interest being charged on the outstanding finance between the car being written-off and the eventual delayed payouts. If so this again seems to be a ruck between 2 insurers disadvantaging the customer.

I think more info is still needed.

ginnyknit

Thank you all for the input and I am off tomorrow to seek help. Trouble is how many people just pay these things without questioning them? Ah well cross your fingers