One consideration when choosing Gap Insurance is who are you buying the policy from? The policy features and benefits are clearly important to check too, but who exactly provides the Gap Insurance cover, and will this detail instill you with confidence?
Checking your Gap Insurance provider
You may be forgiven for thinking this is a one stage process, however it is not. There are quite a few things to think about here. Firstly, there are likely to be 3 different companies involved in the Gap Insurance policy, each providing different services to the cover. Lets look at them in detail:
1- The ‘retailer’ – this could be the motor dealer or the insurance broker you are buying the policy from. They simply act as the ‘retailer’ of the Gap Insurance policy, but are responsible for how the Gap Insurance policy is sold to you. They will take payment from you, and pass on the details to the other companies in the chain.
2- the Administrator – acts as the provider of the Gap Insurance policy to the retailer from the insurer. They will also normally act as the company who would settle any claim on the policy should you make one. A Gap Insurance administrator of standing would normally provide policies into a range of companies, from internet brokers to motor dealers. Again, search the name in Google to get a gauge on how big the administrators are, and how specialised they are in the field.
3-The Insurer – This is the company who ultimately sanction your claim, and so are possibly the single most important aspect of your Gap Insurance policy. Again, Google is a wonderful tool for finding out all you need to know about insurers. Gap Insurance policies are not always underwritten by ‘household’ names, but often these insurers are the underwriters of large schemes you will be aware of.
Remember also that there are a large number of insurers based overseas these days. Companies such as Allianz, Mapre Abraxas, AM Trust and more all have there roots from overseas markets, but have a large presence in the UK Gap Insurance market too. Many insurers based themselves in European financial centres such as Gibraltar. Are these insurers just as safe as a purely UK insurer? Well, millions of UK motorists think so every year, and if there had been any problems do you not think you would be aware of it by now with the power of the internet?
You may find some sources who tell you that you have to beware of any overseas based insurer, but we live in a every expanding global marketplace, if you can find any evidence of wrong doing from these types of insurers please let us know, as we have never heard of any.
Ultimately, the Gap Insurance policy should be covered by the Financial Services Compensation Scheme, whereby if the Insurer fails, then there is a scheme to protect you. Any scheme not covered by this should be avoided if protection is your ultimate aim.
There are other questions you may wish to ask of your insurer. Are they a specialist in this type of cover? How long have they been underwriting Gap Insurance? Do they underwrite any other ‘brand name’ schemes you may have heard of? Is Gap Insurance featured on their company website (it may not always be the case, as often large Insurers websites are generic and do not feature any particular cover they underwrite). If so, you may get an idea as to they types of cover they provide.
These questions may help you get a better idea on the insurer you are looking at.
Things to check for your Gap Insurance provider
FSA Registration – your ‘retailer’ must display their FSA registration number on the documents or and the website you are using to buy the policy. It is important that you check this number on the FSA register. By putting in the reference number shown by the retailer, you will be able to confirm their FSA status, how long they have been registered and if they have any disciplinary history with the FSA. Gap Insurance brokers are a relatively new form of specialist retailer, so do not be surprised to see your Gap Insurance broker has not been around for many years. However, a company that has been around a year or more is likely to have accumulated many thousands of sales, and you would get a fair idea if they have had any problems at all. A company who has been registered only a handful of months may not have a track record to fall back on, and for you to check.
Be aware also that the ownership of a website can change, and this may be a poor indication of of the age of the company you are dealing with now. Just because a website has been around for years, do not assume that the FSA registration and the company has been around for that long too.
Check the FSA registration carefully, if it is not registered then they should not be offering products for sale in the UK at all.
You should also check the FSA registration of the Administrators and the Insurers too.
Trade Bodies – You can also check as to whether the companies are members of any trade bodies. For example, is the Gap Insurance broker a member of The British Insurance Brokers Association (BIBA)? Many Trade bodies have standards that their members must meet, so again can give you indications on the standard of the company.
In our opinion, if you take these points as a guideline, you can discover lots of information on just who you are getting your Gap Insurance cover from.