GAP Insurance Liquidation

ernie

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I've just had a notification that the GAP Insurance I took out with Warranty Direct a year ago is being cancelled due to the liquidation of LAMP Ins. Co., who underwrite it for WD. Anybody else in the same boat?

As it is protected by the Financial Services Compensation Scheme, I will be refunded pro-rata and paid 90% of what is due. WD has done the decent thing and said that they will refund the remaining 10%.

It does make me wonder if they got caught out by the increasing numbers of write offs of modern cars and their increasing complexity because we don't often hear of insurance companies going bust.

The question might be whether I will be able to re-insure as I have the notion that these policies need to be arranged within a certain time of purchase.

There might well be other companies affected by this as well as WD.

Ernie
 

219

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It really , in principle, shouldn’t be necessary since your insurer ought to make you ‘whole again’ by putting you back in the same position you were in prior to the loss .
 

PenelopePitstop

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According to other forum, 3 GAP companies went bust in last couple of years. Re-insuring to Return to Invoice or Return to Value for new car could be problematic now. Usually there's 90 day from new for that.

I had GAP underwritten by Qudos Insurance A/S (“Qudos”), an insurer based in Denmark. Got following letter with replacement cover:

"Following Qudos’ bankruptcy and in accordance with the Danish Insurance Contracts Act your Qudos policies were cancelled on 28 March 2019. The purpose of this letter is to confirm that under the Policyholder Protection Rules we have secured replacement policies which have been paid for in full by the Financial Services Compensation Scheme (“FSCS”). This compensation payment is being made subject to FSCS terms and conditions, available at: Qudos Insurance A/S customer information |FSCS.

Your replacement policies start on the 8 February 2019 which is the date that the Danish Guarantee Fund (“DGF”) ceases to compensate Qudos policyholders so that the protections you purchased for your vehicle will continue uninterrupted."
 
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grober

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LAMP Insurance - News & customer info |FSCS
Who could imagine that a little old insurance underwriter could exist in Gibralter with all that money to write policy--- oh hang on mo--seemingly they didn't have all that money after all. :rolleyes: Gibralter you just gota love their Derek Trotter inspired insurance regulation--chusty!
Qudos was a Danish company regulated by the Danish Financial Supervisory Authority and was able to operate here under what is called “a freedom of services basis”. In a nutshell, that is a provision that allows an insurance provider to underwrite a contract in one European Economic Area country, even if the risk is based in a different country in the EEA. This may alter after "B****t?
 
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Dryce

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It does make me wonder if they got caught out by the increasing numbers of write offs of modern cars and their increasing complexity because we don't often hear of insurance companies going bust.

I wouldn't be surprised if the nature of the insurance changes the negotaion on some claims.

In the past I've seen owners try very hard not to get vehicles written off if the decision is an economic one. GAP with return to invoice shifts the balance on that - you'd actively want a writeoff. The other factor in this is may also be hire car expenses - if an insurer writes off the car that limits the anciliary costs on the claim - so if both sides have an incentive to go for write off then the GAP insurer is caught in the middle.

An indicatior that this is happening might be an increase in the number of Cat D / N writeoffs.
 

JBD

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I've just had a notification that the GAP Insurance I took out with Warranty Direct a year ago is being cancelled due to the liquidation of LAMP Ins. Co., who underwrite it for WD. Anybody else in the same boat?

As it is protected by the Financial Services Compensation Scheme, I will be refunded pro-rata and paid 90% of what is due. WD has done the decent thing and said that they will refund the remaining 10%.

It does make me wonder if they got caught out by the increasing numbers of write offs of modern cars and their increasing complexity because we don't often hear of insurance companies going bust.

The question might be whether I will be able to re-insure as I have the notion that these policies need to be arranged within a certain time of purchase.

There might well be other companies affected by this as well as WD.

Ernie

It’s a huge thing at the moment and I don’t think many realise. We’ve just changed the company our policies are underwritten by because Amtrust have completely pulled out of gap. Write-off rates are through the roof and lots of companies going pop


Sent from my iPhone using Tapatalk
 

markjay

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This is not surprising....

Insurers write-off cars when the repair cost reaches a certain percent of the car's market value.

The reason for this is that the insurer has other costs associated with the repair (courtesy car, warranty, etc), and also because the write-off will be auctioned by Copart which will produce some income to the insurer against their loss.

But recently repair costs increased, in part due to the falling Pound that makes imported parts more expensive, and in part due to the fact that wages inflation has been much higher that CPI or RPI in recent years.

So more cars get written-off... in fact members coming on the forum asking for advice on how to fight their insurer who wants to write-off their lightly-damaged car, has become a common occurrence recently.
 

zena123

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Hello ! Just read this thread. Bought 'used' C220 on Saturday from MB. Was offered Gap Ins. (4 years, cost £875). Should I jump at this ?? In view of above posts, I will need to find out who the insurer is, but what the position is after Brexit, esp. if the company is based in Denmark, is probably a mass of confusion. Definitely won't go for Gibraltar ! Hope s.o. on this board has psychic powers & can make suggestions !
 

zena123

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Didn't mean to cast aspersions on Denmark ... (a country I rate highly) ... was more of a comment about our future links to EU companies. PenelopePitstop above seems to have struck lucky !
 

Dippo

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£875 for four years on a used C220 seems very expensive. Have you done a quick google search for quotes?
 

zena123

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No. Will do. Also thought of asking my own insurer - will prob. do that tomorrow. Used C220 is 20 months old .... still too expensive ??
 

Dippo

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The last time I took out GAP insurance was on a new 5 series (am I allowed to say that?) back in 2014. It was for 3 years, starting at the end of year 1 as my insurer offered a replacement vehicle in the first year in the event of a write off. I think it cost me around £300 - and I got a refund of £90 when I sold the BMW at 3 years old.
 

DSM10000

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No. Will do. Also thought of asking my own insurer - will prob. do that tomorrow. Used C220 is 20 months old .... still too expensive ??

Vastly overpriced. It is making the dealer a good profit and in all probability you will never see any benefit from it.
 

PenelopePitstop

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I paid £280 for Gap for 5 years, Return to Invoice, £25K claim limit, on used SLK. That was with gapinsurance123.co.uk but this brand doesn't sell policies any more. They allowed me to change for free to different SLK, 2 years into policy. If you go to their website, there are links to two sister companies that still quote: https://gapinsurance123.co.uk/4/getaquote I have policy with Total Gap Loss and with Ala (two cars). If you want to use Ala Gap insurance, you can use code MSE25 to get 25% discount.

£875 Gap policy from the dealer, will probably give £400 commission to the salesman. I got internal document showing GAP commission spreadsheet from Audi dealer by accident, and salesmen were getting min. half of policy cost.
 

grober

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There are several "events" in cars life where it undergoes a sharp drop in market value. First is when as a new car it drives off the forecourt and second when its out of manufacturers warranty and third when its superceded by the launch of a newer model . Altho integrated into /hidden by longer depreciation curves these "events" can actually occur overnight. The first two are predictable the third not so much. £875 is EXPENSIVE!
 

Thrash

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I had policies previously with GAP Insurance 123 but I believe they went into liquidation a few years ago and the policy was picked up by someone else so the policy was still valid. Seems to be happening increasingly often, I did always wonder why the big insurance companies didn't offer GAP, it must be a fairly risky business.
 

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