Car stolen issues with gap insurance

scoob38

My car was stolen about 6 weeks ago and my car insurance has paid out.. I bought gap insurance from the car dealer has he told me that it would cover the difference between the car insurance pay off that the finance left.. I have no found out that my gap cover doesn't do that I quote:
in the event of a total loss, the insurer will pay the difference between the Outstanding Finance Balance strictly relating to the vehicle sale and the Market Value at Loss. The Market Value at Loss is defined as the Glass’s Guide retail value (GGRV) at loss, or the Insurers Settlement offer whichever is higher
So it means that my gap insurance is rubbish not what i thought it was. There only paying out £1500 i am now £1000 short... is there anything i can do?

Im i at fault or the car salesman?

scoob38

My Outstanding finance was 16232, car insurance paid out to 14465
gap only paid out 550...

InsideInsurance

It will be yes.

You could raise a complaint about miss selling but ultimately you have a responsibility to read the policybook in full yourself to be sure you are happy with the level of cover.

At the same time you could also complain to the insurers for under valuing your vehicle

vax2002

You need to get the contract read by a legal expert, if they decide it is in force send them an invoice for the balance and issue a county court claim for enforcement of the contract.
All very standard with insurance companies, they never pay straight up.

Name the company, it often helps them have another look.

BJV

Just before you decide who to complain or blame what was the cars valuation?

Gap Insurance is supposed to be a top up. An amount on top of your own insurance companies settlement and not a scape goat for your insurance company to use so that can pay less than the going rate.

If your own insurance company paid you less than the going rate why did you accept it? Both your own insurance company and your gap insurance company have to be able to justify where and what they base their figures on. Ask them ?

Also did the finance include any late payment fees, negative equity from another agreement?

Have you already agreed the settlement with the insurance and gap insurance company yet?

Sorry to ask so many questions just want to make sure I understand it.

InsideInsurance

Good quality GAP products do what you say.... low quality products do frequently leave a second "gap" because of intentionally not using the primary insurance settlement but either their own valuation or a predominately unobtainable book price.

Whilst the product quality is reflected in the wholesale price of these policies there is rarely a link between quality and consumer price

Marcus_Mcmann

In any situation where you feel you were missold I would always suggest calling Citizens advise Consumer Helpline (used to be consumer direct) 08454 040506 they can advise you and also log it with trading standards so a posible criminal investigation can be started.

scoob38

I agreed the car insurance payoff after agreeing with gap insurance. I was of the understanding that after i agreed they would pay the market value up to finance...
Then i got a letter saying that
Under the terms of the Finance GAP Policy, in the event of a total loss, the insurer will pay the difference between the Outstanding Finance Balance strictly relating to the vehicle sale and the Market Value at Loss. The Market Value at Loss is defined as the Glass’s Guide retail value (GGRV) at loss, or the Insurers Settlement offer whichever is higher. With relation to the vehicle sale the Purchase Price is defined as the GGRV at Sale or the Invoice Price whichever is lower. The policy has no liability for Warranty or Policy Premiums, Road fund Licence Fees and dealer fitted options (including paint treatments). If applicable, the policy has no liability for any arrears or charges applied to the account or negative equity.
As previously advised liability of the policy was for the amount paid of £440.86. This was calculated as follows:
Outstanding Finance Balance £14,910.86
Less Market Value at loss £14,470.00
Claim Settlement £ 440.86
The Outstanding Finance balance differs from the amount stated on the letter from Barclays of £16232.16, this was due the amount financed being in excess of the Purchase Price and a deduction to the outstanding balance was made proportionally.
The above calculation has now been revisited following the options fitted to the vehicle being notified to us. The revised GGRV’s were returned at £15800.00 at sale and £14720.00 at loss. This changes the calculation of the claim as follows:
Outstanding Balance £15233.99 (£16232.16 less £998.17)
Less GGRV At Loss £14720.00
Less Amount Previously Paid £ 440.86
Revised Settlement £ 73.13 (total claim £513.99)
A deduction to the outstanding balance was made because the amount financed was in excess of the Purchase Price. Using the above definition of Purchase Price we took the GGRV as the lower figure, this is the revised value with the options of £15800.00.
The policy is liable for the finance equal to that amount. The total amount financed was £16847.00 this included the dealer options and premium paid for the Gap Policy and are not covered by the policy. Deducting the GGRV from the amount financed gives a difference of £1047.00. This figure as a percentage of the amount financed is 6.21% (1047.00/16847.00x100), this equates to £988.17 as a percentage of the outstanding balance as shown in the above calculation. This takes into account the payments made against the uninsured elements of the finance balance.
I have noted the advertisements for the 61 Plate vehicles sent in to support the invoice price paid. The invoice price for the vehicle is shown at £15895.00 and in comparison the GGRv at Sale is now returned at £15800.00. Previously there was a higher variance.

I rang twice and was told they would pay the differenance.

I have settled with my car insurance as instructed by the gap insurance.. I had AA warranty finance gap..

dacouch

They are basically saying your oustanding finance includes extras you bought from the car salesman eg gap insurance, any warranty, any other insurances and any special polishes etc etc.

Their cover is for the difference in value of your finance based only on the car (Excluding the extras eg Gap Insurance etc as above) and the amount your Insurer pay you.

They've valued your car at a similar amount to your Insurer £14720 against your Insurers £14465.

As they don't pay for the extras you added to your finance, they have excluded the cost of these (Presumably including any interest) and deducted it from what they are saying your outstanding balance is.

BJV

InsideInsurance wrote: »

Good quality GAP products do what you say.... low quality products do frequently leave a second "gap" because of intentionally not using the primary insurance settlement but either their own valuation or a predominately unobtainable book price.

Whilst the product quality is reflected in the wholesale price of these policies there is rarely a link between quality and consumer price

I would not agree any policy I have ever which claims not to use a market value clause of any kind instead states that you must have obtained full settlement from your own motor insurance company and that their liability will not be increased if you do not. That is not to say that there is not a policy out there it is just that I have not come across it yet.

Instead insurance as you will know is a business just like any other. Subsequently volume of business and rates of Insurance premium tax means that you can find quality gap insurance at fractions of the cost. After all rates of IPT can make a massive 14 % difference alone.

The sheer nature of gap insurance means that which ever provider you use just like any insurance company they will want to ensure that they pay their share nothing more and nothing less.

Surely any insurance company can provide proof of where they have obtained the valuation. Glass's Guide which is most commonly used is freely accessible on line as are many many others.

BJV

dacouch wrote: »

They are basically saying your oustanding finance includes extras you bought from the car salesman eg gap insurance, any warranty, any other insurances and any special polishes etc etc.

Their cover is for the difference in value of your finance based only on the car (Excluding the extras eg Gap Insurance etc as above) and the amount your Insurer pay you.

They've valued your car at a similar amount to your Insurer £14720 against your Insurers £14465.

As they don't pay for the extras you added to your finance, they have excluded the cost of these (Presumably including any interest) and deducted it from what they are saying your outstanding balance is.

Sorry had not read this post. Totally agree not many policies will cover the cost of insurance based items let alone the negative equity he carried forward.

I do think though that the OP may have grounds for miss sell as the was sold the policy on the basis that it would repay this finance. If the dealership arranged the finance then they would have known that the OP was borrowing more than the purchase price and should have drawn this fact to his attention.