Blog
GAP Insurance complaints drop – lets keep them going down
The Financial Ombudsman Service has recorded a drop in the number of complaints regarding GAP Insurance – good news! From April to December 2014, a total of 164 complaints were made to the ombudsman, a drop of 5% from the same period in 2013.
However, more can be done to reduce complaints further and that starts with communication. The most common theme of complaint comes down to confusion around the different types of GAP insurance on offer and under what circumstances they would pay out.
To learn more about how to improve your customer communications, read our blog: Top 5 tips for great communications.
What is GAP Insurance?
Another area that would help to reduce the number of complaints around GAP Insurance is education. Educating your sales team and ensuring they fully understand the ins and outs of the financial products you are selling is essential.
Car Care Plan offers specialist training to help dealerships understand financial aftercare products. To find out more call 0844 573 8000 or contact us here.
To give you a quick overview, here are the three main types of GAP (Guaranteed Asset Protection) Insurance:
- Finance GAP insurance – after a valid claim, the payment is made direct to the finance company to meet any amount still outstanding on the vehicle loan after the motor insurer has paid out.
- Return to invoice insurance – the claim payment is made to the consumer, based on the original invoice price minus the amount the motor insurer has paid out.
- New car GAP insurance – the payment is made to the consumer, based on the price of a new vehicle at the time of the claim but less the amount the motor insurer has paid out.
What kind of complaints does the Ombudsman receive?
It pays to look closely at the kind of complaints the Financial Ombudsman receives, so we can learn from them and improve the way we sell our aftercare products. If we can keep the customer happy, they will want to return.
The specific issues highlighted by the Ombudsman in relation to the mis-sale of GAP Insurance include the consumer claiming:
- They were told all outstanding finance would be cleared in the event of a total loss
- The cover the policy would provide was not explained properly
- They were not told about the restrictions or limitations of the policy
- They were sold the wrong type of policy
- The terms of the policy were so restrictive that they were unfair in law under the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR)
- They would not have bought the vehicle had they understood the limitations of the GAP insurance.
To learn more about the benefits of selling GAP Insurance and how to improve your sales, read our blog: Benefits of selling GAP insurance correctly.