rayhoop Posted July 31, 2013 Share Posted July 31, 2013 Right - so recently I bought a 2012 VW Sharan from a VW dealer. he was trying to sell me GAP insurance for around £400... I've had quotes online for £190ish.. so politely declined. He then went on to say that 'other' GAP insurance providers are underwritten by an underwriter who is based in Gibraltar... and there is a risk they can 'fold', dissapear with everyone's insurance payment and leave you without cover.... where as the VW policy is underwritten by VW itself... I thought "what a load of Porkies"... but last night when I checked out all the policies on line (even from The AA) are underwritten by a firm in Gibraltar... So, part one of his sales squaak was true.... but is it true they could do a runner with our cash and leave us without any protection?? Can anyone here provide a qualified statement on how much protection we (UK consumers) have against off-shore/EU based underwriters dissapearing? Quote Link to comment Share on other sites More sharing options...
Ekona Posted July 31, 2013 Share Posted July 31, 2013 FSA. Quote Link to comment Share on other sites More sharing options...
rayhoop Posted July 31, 2013 Author Share Posted July 31, 2013 FSA covers the UK based brokers... but it does not cover the EU based underwriters. It looks like Gibraltar based firms are regulated by the Gibraltar Financial Services Commission.. Actually, looking at this a bit more, pretty much all underwriters are based in Gibraltar... including Admiral etc... So I'm guessing it is something to do with the local tax laws? Ooh.. this article might help explain it... http://www.telegraph.co.uk/finance/2843209/Insurers-flock-to-Gibraltar.html Quote Link to comment Share on other sites More sharing options...
Luke0549 Posted July 31, 2013 Share Posted July 31, 2013 I sell GAP at work. And 100% worth it if buying a new car. a good thing to do is 'street view' some of the cheaper GAP company's, a few of them are flats above shops! And yes, they will fold and run off with your money before you know it. Quote Link to comment Share on other sites More sharing options...
rayhoop Posted July 31, 2013 Author Share Posted July 31, 2013 Hmm- majorty of the websites selling GAP insurance do look to be farms, flats, rented office space etc. But being FSA regulated, I would have thought it is safe buying from them? I have found there are a handful of providers who sell GAP insurance underwritted by Lloyds of London, so you are fully covered by the FSCS. They are competitively priced too. Gibraltar based ones are apparently also covered under a similar EEA scheme, but you need to get confirmation of complaints procedures etc from them as the level of compensation etc may vary. Quote Link to comment Share on other sites More sharing options...
Luke0549 Posted July 31, 2013 Share Posted July 31, 2013 You think those companies are going to comply with FSA? you really think they've all been set up legally? and you think if a claim came through and they needed to pay say £10,000 from a luxury car due to it being stolen that they will have that kind of money? I show my customers that prices of GAP elsewhere are cheaper. but I also show them WHY they are cheaper. And 99% of them chose to go for a substantial company that is backed by main dealers. Quote Link to comment Share on other sites More sharing options...
CB1878 Posted August 1, 2013 Share Posted August 1, 2013 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? Quote Link to comment Share on other sites More sharing options...
rayhoop Posted August 2, 2013 Author Share Posted August 2, 2013 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?? Love it! Thanks for that. Good to get a wholesome view. I''ve found a policy and price I like. Just holding back a moment for another quote to come through. Quote Link to comment Share on other sites More sharing options...
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