When you start looking on line for gap insurance it is easy to be confused. Lots of different gap insurance suppliers all offering slightly different terms , conditions and promises.
So is there a difference between a gap insurance term and a promise and how do you how which is which?
Anything which is written down in black and white in your gap insurance policy document is a term or a condition. Anything else is simply a promise. Yes in an ideal world this may happen but it is not enforceable and not part of the basis upon which your claim would be settled.
This is a very important distinction and one that you really need to understand.
The reason is that in most cases just like us your on line gap insurance broker just like your main dealership is not the company or organisation who is ultimately authorising payments for your settlement. Instead the gap insurance policies are underwritten by an insurance company.
For example as you know our limited company name is Aequitas automotive limited and we trade on line via Gap Insurance 123 underwritten by Enterprise Insurance Company PLC and Easy Gap insurance who are underwritten by AM Trust Europe Limited.
We just like you dealership do not have any authority to change or modify any gap insurance terms and conditions of your policy and instead simply promote the benefits of it.
This in real terms means that what ever we say for example… this will be a little far fetched to illustrate the point but we hope that you get the idea… is simply a promise that in an ideal world this will happen.
At the end of the term of the gap insurance policy or should you ever need to make a claim we will buy you a new Ferrari!
So lets look a couple of years down the line and you come to the end of your gap insurance policy and dutifully expect your new Ferrari, in red I hope and you become quiet rightly very upset when this does not happen.
The reason is that this was simply a promise. No where in your documents did it mention that you would recieve an Ferrari and so it is not enforceable.
As you know the financial service is heavily regulated and quiet rightly so to ensure that advertisements are not misleading, and amongst many other functions it performs to make sure that your policy performs as it should.
In fact in this case the FSA would in out opinion deem that the policy had performed as it has done exactly what it said it would in the terms and conditions. Still no Ferarri! However the office of fair trading may be interested as clearly you based your buying decision on a advertised promise which is not being fulfilled.
Instead we would suggest that it is far better to make sure that you only ever base your buying decisions based on only what is mentioned in the terms and conditions of your policy. After all if you know exactly what your policy will do before any after making a claim there can never be any nasty surprises .
Making a gap insurance claim insurance claim can be stressful, something horrible will have happened, either your vehicle has been written off or you have been involved in an accident either way these are both not ideal situations and not a good time to find out that your “New Ferrari is not coming!”
So always read all of your policy documents before you buy any level of gap insurance from anyone.