CB1878

Newbie on here but just felt I had to jump in regarding an industry I have worked in and sold Gap Insurance for a number of years, both in car dealers and for independent brands. I should also point out that I have sold Gap Insurance that is underwritten by both UK and offshore insurers. The key with any policy is that the policy is covered by the FSCS (Financial Services Compensation Scheme) in the UK, and as far as I am aware all the Gap Insurance names in the market are covered by this, regardless off the country of origin of the underwriter. Also these products should also be covered by the Financial Ombudsman Service (FOS) .'Passported' permissions for companies outside the UK means that they have to design their schemes to act in the same way as a UK insurer, and claims will be handled by a UK company (for example the AA ones are handled in Sheffield). The independents in the UK do tend to be smaller, specialist brokers, but this should not put you off at all. The policy is underwritten by an insurer, so if the broker goes to the wall then you are still covered. As for the difference in price between the motor dealer and the independents, the answer is simple...........the dealer is way too expensive! When I was a Business Manager at a dealer we sold a 3 year RTI for £399. The Insurance Premium Tax accounts for 20% (you only pay 6% when you go to an independent as that is the standard rate). We used to pay £50 to the salesman, and I got 10% as the manager. Also the dealer can only sell a product to its customers, so if a dealer has a 30% sales rate on 2000 cars a year then that is only 600 policies a year. The bigger independent brokers will sell possibly 20 times that figure, and that puts them in a much better position to get better supply rates than an individual dealer. And the comment that VW underwrite their own Gap that is actually completely untrue, and a typical example of a comment by a car salesperson with a poor knowledge of an insurance product (I do not feel bad making that statement as I was one!). If you check the Gap Insurance documents on the VW website the policy is underwritten by Mapfre Asistencia Compañia Internacional de Seguros y Reaseguros, Sociedad Anonima. Sound very English do they not?? They may be branded VW but they are not the insurer. This is typical of many manufacturers brands, and sadly of the explanations of car sales staff too. I should point out that the insurer I mention is one of the largest suppliers in the UK market today. If you think that offshore Gap Insurers run off with your money then simply do a check on the internet, if it did then you would find it everywhere on forums. Also check the Which? report on Gap and Defaqto. As someone said the AA products are underwritten by an insurer who is from Gibraltar (who incidentally sponsor Leeds Utd Football Club so they are hardly small are they?), as well as a number of the independents. It is interesting that this insurer accounts for a large of the top rated products, so the product features are top notch too. How many manufacturer products are rated 5 star by defaqto? I think it is 3 out of about 30? If you check many of the manufacturer add on products and motor schemes they are underwritten by insurers with an offshore origin. The key is the cover by the FSCS in the UK and the FOS. Also do not buy from your dealer, the products are far too expensive and nowhere near as good in most cases. £400 from your dealer or 25% of that price from an independent for a better product?