GAP insurers nonetheless failing to reveal honest worth danger FCA crackdown

Many insurers and brokers are nonetheless failing to reveal they’re providing honest worth to clients regardless of business efforts to enhance governance and oversight relating to assured asset safety (GAP) merchandise.

GAP insurance coverage is an add-on to motor insurance coverage and covers the distinction between a car’s buy value and its present market worth.

Earlier this yr, the FCA stated its knowledge confirmed that there had been circumstances the place solely 6% of the quantity clients paid in premiums was paid out in claims with some corporations paying out as much as 70% of the worth of insurance coverage premiums in fee to events within the distribution chain, comparable to dealerships.

Consequently, corporations providing this kind of insurance coverage got a three-month ultimatum by the regulator in February to take rapid motion, or danger intervention.

Some corporations had been allowed to renew providing GAP add-on gross sales in Might.