Firms pause sales of GAP insurance

At FCA’s request, multiple insurance firms have agreed to pause sales of GAP insurance. These firms account for 80% of the GAP market.

FCA is concerned that GAP insurance is failing to provide fair value to consumers. FCA’s latest fair value measures data showed that only 6% of the amount customers pay in premiums for GAP insurance is paid out in claims.

FCA wrote to firms manufacturing GAP insurance products in September, and asked them to take action to prove customers are getting a fair deal. It was not satisfied with the response.

Following this, FCA made an agreement with the firms to pause the sale of GAP insurance products. Firms have also committed to make changes to their GAP products to provide better value for customers.