Following the latest Financial Ombudsman Service data showing a drop in GAP insurance complaints; the ombudsman and Auto Trader say more could be avoided with improved dealer / customer communication.
As the FCA considers its final remedies for the insurance add-ons market, taking the time to fully explain what policies cover, as well as the benefits of each product, will help boost transparency and customer satisfaction.
Head of outreach at the ombudsman Caroline Wells said: “We are urging dealers to take a little extra time to explain the product at the point of sale, or at the point of claim. Often it’s simply a question of explaining something in plain English, why exclusion is relevant in a policy for example. But, too often the people who contact us talk about a ‘computer says no’ approach, and that leads to understandable concern on the part of the policy holder.”
Auto Trader head of motor finance Paul Harrison said: “Insurance add-ons are an important income stream for dealers and latest ombudsman figures show that the vast majority are selling responsibly. However, now is the time for all dealers to ensure their GAP insurance sales processes are fit for purpose. We encourage all our retail partners to put good communication at the heart of every transaction, particularly ahead of planned FCA rule changes expected later this year.”
From April to December 2014, 164 complaints were made to the ombudsman, down 5% compared with the same period in 2013. According to the ombudsman, the most common theme of customer complaints is confusion around the different types of GAP products that are sold, under what circumstances policies would pay out and any notable exclusion’s in the policy.
The FCA’s consultation on proposed remedies for the sale of GAP insurance closed in March. The regulator is set to announce its final remedies in June, ahead of implementation in September 2015.
Laird Assessors - 23/03/2015 13:07
As independent assessors, we write off thousands of vehicles each month. We value the vehicles using a triangulation of Glass's, CAP & Auto Trader research to ensure an accurate & realistic market value. We regularly have GAP insurers trying to persuade us to increase our value for no other reason than to reduce their payout at the expense of the motor insurer. It is not uncommon that they suggest to the driver that we have undervalued the vehicle. It is therefore not necessarily the dealers that are at fault here, but the practices of the GAP insurers.