Gap insurance has gone up a lot!

[MrAdamwood]

Hi David

I purchased Gap for my Octavia Vrs back in 2015 for £175 for you guys (gapinsurance.co.uk)  . Just got a quote for my incoming Karoq sel and it’s £336!! That’s  dealer territory what’s going on? 
Thanks 

Adam 

[Tim@GAP]

Hi Adam

 

Sorry for the belated response to this one - I know that your query was dealt with at the time by David via a PM, and we appreciate the fact that you've since taken out a policy for your Karoq with us. My reply today is for the benefit of other readers.

 

Dealer prices remain sky high - unjustifiably so - and in the vast majority of cases they're only able to offer Invoice GAP insurance (aka Return to Invoice) cover. The specific price quoted to you above was for superior Replacement GAP insurance; our equivalent to the Skoda policy would have been less than £200 for 4 years' cover, and that's before our www.gapinsurance.co.uk discount code for forum members (BRISKODA10) had been applied.

 

That said, there's no doubt that GAP insurance prices have increased across the industry, particularly for policies of longer duration where the risk of write-off is higher. It's been a fairly turbulent few years, with no fewer than five financially-unrated GAP insurance underwriters going bust since the end of 2016, and the more stable A-rated insurers taking a more cautious approach to risk, or choosing to exit the market altogether. There's been something of a scramble in recent months in particular, with a growing number of GAP providers finding themselves with no choice but to use unrated underwriting, in spite of the higher potential risk of insolvency.

 

Whilst all UK providers are regulated by the Financial Conduct Authority (and policies protected up to a point under the Financial Services Compensation Scheme), we have only ever used A-rated insurers in order to mitigate the risk in the first place. All of our new policies are underwritten by a syndicate at A-rated, UK-based Lloyd's of London. We're often still the cheapest of the online providers, but in all cases we offer a high-quality product with the peace of mind of stable underwriting.

 

Regards

Tim