GAP Insurance for Cars - Bad Experience Warning!

sbailey10

I purchased my Ford Mondeo in September 2005 from Polar Ford and at the time they sold me GAP insurance so that if the car was written off, we would get back the full value we paid for it (less the excess).

Almost 5 weeks ago we had an accident whilst on holiday in Dublin and after 2 weeks the insurers (Norwich Union) confirmed they were writing off the car and gave us a pre-accident value of £7000.

We contacted the GAP insurers, Abraxas (part of Mapfre) who said they valued the car at £9,250 and they would only pay the difference between their valuation and what we paid (£10,475) less the £220 excess ie they would only pay us £1,005. They said they believed the Norwich Union valuation to be very low and to appeal the value.

We went back to Norwich Union who asked us to submit documentary proof that the car was worth more than the £7000 valuation. We paid for a valuation from Glass' Guide, Parkers and provided 10 different advertisements for identical cars for sale through autotrader, exchange and mart (which NU said was acceptable) and faxed it all through to them. Norwich Union have raised their valuation to £7,500 but that still leaves us adrift to the tune of £1,750.

Where do we go from here? We believe that the GAP insurance policy was "mis-sold" to us but we don't know where to escalate to.

Does anyone have any advice or experience. I have 2 young children and am self-employed and running a business and doing the school/nursery run without a car isn't much fun.

Thanks

Astaroth

Could you not ask for the evidence from the GAP insurers of their valuation and use this same proof with NU? if they cant provide proof then argue their valuation down

Wig

Ask both insurers to provide evidence for their own valuations, then forward both to the other insurers to ask them to explain themselves.

Regarding mis-selling presumably the GAP policy explains everything of how the policy works. Your beef is therefore with the salesperson who did not explain it well enough to you. I'm no expert but he would have had to say something definate like "whatever your insurance co values the car, this company will pay you the difference upto the purchase price."

Even if he did say something like that, and the court believes you I'm not sure if you would then be entitled to a refund of the policy amount or if you would be entitled to claim for the difference between the two policies.

I guess you need to speak to the CAB, or if you have some sort of legal protection on your policy you could ask them if this sort of thing is included. Or you could ask a solicitor for a free initial session.

I imagine the trouble will be choosing which ins company or the car seller to take to court. Sounds like a right old mess.

Please update the thread when you have any news and when you get a final settlement.

Wig

Oh and btw

There is also the option of (after writing to each insurer and sending each insurers response to the other insurer to try to get them to agree on a valuation figure.) then informing each insurer if they can't both agree on a single valuation figure that you will have to refer both insurers to the insurance ombudsman, which is a good idea I think, because whatever the IO decides they will have to agree to it. and I can't see the IO accepting that the same car is allowed to have 2 values depending on what sort of policy it is.

greyster

Interesting, I have just purchased a second hand Honda Civic from a Honda dealer and was pretty much persuaded to take out 3 years gap insurance for £300.

I was told that my claim would cover the difference between what the insurance company pays out and what I paid on the day of sale. It makes me want to go and double check now.

Wig

greyster wrote:

Interesting, I have just purchased a second hand Honda Civic from a Honda dealer and was pretty much persuaded to take out 3 years gap insurance for £300.

I was told that my claim would cover the difference between what the insurance company pays out and what I paid on the day of sale. It makes me want to go and double check now.

If it was very recent you should have a cooling off period. I think a good idea here would be for the policy seller to sign a written confirmattion that *whatever* figure the car insurance company values it at the GAP insurer will honour that figure. And if they don't then the car seller will stump up for the difference.

Debt_Free_Chick

sbailey10 wrote:

Norwich Union have raised their valuation to £7,500 but that still leaves us adrift to the tune of £1,750.

I'm confused

NU have offered £7,500 and the GAP insurers have offered £1,005 which is £8,505 in total.

The value is £9,250 ... which means you are "short" by £745 .... not £1,750

Go back to NU and ask for £8,500. If you get £8,000 - accept it.

bookgirl_2

We have just purchased GAP insurance for our new car, and the paperwork does say that the 'purchase price' is defined as what you pay or 105% of the glass's guide price, whichever is the lower - i.e. if you pay over the odds for your car then they are only liable to pay the reasonable price you should have paid.

Llyllyll

greyster wrote:

I was told that my claim would cover the difference between what the insurance company pays out and what I paid on the day of sale. It makes me want to go and double check now.

That's exactly how I was told GAP insurance worked. The day I bought my car Volvo also tried to to flog me tyre insurance and wheel insurance. All in all the extra insurances would have put approx. another £700+ on the cost of the car!

djohn2002uk

Debt_Free_Chick wrote:

I'm confused

NU have offered £7,500 and the GAP insurers have offered £1,005 which is £8,505 in total.

The value is £9,250 ... which means you are "short" by £745 .... not £1,750

Go back to NU and ask for £8,500. If you get £8,000 - accept it.

You have misread the OP. It's not the value (£9,250) but the purchase price (£10,475) that is used in this case. That's the whole idea of GAP insurance.

scheming_gypsy

A quick google shows 2 GAP Insurances so the OP is worth checking which they have.

GAP Shortfall Protection seems to be more like the situation the OP has whereas GAP Return to Invoice is the insurance that covers what you paid.

http://www.volkswagen.co.uk/finance/gap_insurance