Isn't GAP insurance a scammers dream?

CreditCardChris

You spend £20,000 on a car and take out a 4 year GAP cover policy for £300 or however much it is. 3 years later you purposely crash your car into a wall and write it off, pretend it gets stolen and set it on fire somewhere. Your car being 3 years old is probably worth £12,000 and your insurer will probably pay £10,000 and the GAP insurer will pay the other £10,000.

3 years later and you've just got your money back. I honestly fail to see why everyone isn't milking this?

Obviously I'm not advocating for scamming but I fail to see why so many people aren't scamming the system?

AdrianC

Because if and when the reality is discovered, a prosecution (likely successful) for fraud and a refusal to pay out will almost certainly follow.

foxtrotoscar_2

The Gap is the difference between what you owe and what the car is worth. Not the difference between what you paid and what the car is worth

AdrianC

foxtrotoscar wrote: »

The Gap is the difference between what you owe and what the car is worth. Not the difference between what you paid and what the car is worth

Return-to-invoice Gap is, though.

Aretnap

You could say exactly the same about new for old cover on household policies - if you want a new carpet, why not just throw a load of paint over the old one and say 'whoops' to the insurance company.

The answer is that most people are honest and don't do it, and some of those who do get caught out. Doubtless some do it and get away with it but there aren't enough of them to make the cover unviable, and the premiums can be adjusted to take into account the number of fraudulent claims that do get through.

neilmcl

foxtrotoscar wrote: »

The Gap is the difference between what you owe and what the car is worth. Not the difference between what you paid and what the car is worth

Only if you took out finance gap insurance which is fairly rare. Most people will take out RTI or Replacement Vehicle GAP insurance.

neilmcl

Aretnap wrote: »

You could say exactly the same about new for old cover on household policies - if you want a new carpet, why not just throw a load of paint over the old one and say 'whoops' to the insurance company.

The answer is that most people are honest and don't do it, and some of those who do get caught out. Doubtless some do it and get away with it but there aren't enough of them to make the cover unviable, and the premiums can be adjusted to take into account the number of fraudulent claims that do get through.

^^ This, exactly.

lopsyfa

Aretnap wrote: »

You could say exactly the same about new for old cover on household policies - if you want a new carpet, why not just throw a load of paint over the old one and say 'whoops' to the insurance company.

The answer is that most people are honest and don't do it, and some of those who do get caught out. Doubtless some do it and get away with it but there aren't enough of them to make the cover unviable, and the premiums can be adjusted to take into account the number of fraudulent claims that do get through.

I agree!

You could say this about any insurance product. You can purposely crash your car and then claim whiplash, personal injury etc but the odds are you will be found out, get prosecuted and suffer injury with no pay out.

A friend had GAP claim declined because the week before the incident his car tyre already had some minor issues and main dealer recommended the tyre is changed and he said he will change next week. He crashed before he was able to change the tyre and the GAP was declined because the car was not in good order. So don't assume the GAP will automatically be paid out without the insurer asking some questions.

The incident above is also one of the reasons (apart from usually being too expensive) I will never buy the manufacturer GAP because if you take the car to service there, they could easily point to any previous issues found during service as reasons not to pay out.

jimbo6977

Plenty of people throw their phone down the bog when a new model comes out.

Doesn't make it right though.