The UK financial watchdog has told several online providers of GAP insurance that they can continue to sell their products until May.
GAP insurance is typically sold alongside car finance. It covers the difference between a vehicle’s purchase price or outstanding finance and its current market value, in the event it is written off before finance has been repaid.
The FCA is concerned that the product is failing to provide value and in September wrote to firms asking them to take immediate action to prove customers are getting a fair deal.
The original March 31 deadline given by the the Financial Conduct Authority (FCA) has been extended by a month to give it sufficient time to review all online providers’ fair value submissions.
If a provider’s submission shows fair value and best practices, they will be able to continue to sell GAP insurance beyond April.
Simon England, managing director and founder of GAP provider, ALA Insurance said: “As a provider of GAP insurance with a commitment to championing the consumer, we understand the decision of the FCA to extend their review deadline.
“They need to review all GAP providers’ submissions and to do this properly they need ample time to do so. Our submission has been received and we have been given the authorisation by the FCA to continue to provide GAP whilst they review other business’s submissions.
He said ALA Insurnace believed its submission not only shows that its policies and business practices to be of fair value – but that it also illustrated its commitment to customers in getting top quality insurance products at a fair price.
“We go the extra mile in our customer service which hopefully the FCA have acknowledged too. However, it’s crucial that the FCA issues a statement confirming the new deadline to ensure customers do not miss out on this service which they’ve already deemed useful.
“Customers rely on GAP insurance to safeguard their financial well-being in unforeseen circumstances, and any uncertainty regarding its availability could potentially leave them unprotected.”
England said a clearer timeline from the FCA would not only alleviate concerns among consumers but also enable providers to better plan and communicate with clients, ensuring uninterrupted access to GAP protection.
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- Source: https://www.am-online.com/news/finance/2024/04/05/fca-extends-gap-insurance-deadline-to-scrutinise-fair-value
