ALA response to FCA's latest comments on the future of GAP insurance
1 February 2024
| 2 minutes
As GAP insurance providers await an official decision from the Financial Conduct Authority on the future of the product, Simon England, Managing Director and Founder of ALA Insurance encourages the FCA to stop confusing consumers and to listen to the industry.
“As rumours continue to circle and suspicion mounts, I welcomed the recent statement from the FCA that they have no intention of banning GAP insurance. However, the recent rumours and speculation regarding the FCA’s view on GAP insurance has already done untold damage to the industry and its confusing consumers. Their inconsistent messaging surrounding GAP insurance isn’t fair or clear for consumers.
“We’ve provided GAP insurance to customers for nearly 20 years at ALA Insurance and have a deep understanding of GAP insurance and how vital it can be to consumers. As an online provider we aren’t in the same category as car dealerships and the underwriters associated with those policies - but we are within the same industry and sell the same product. The FCA’s unclear and inconsistent language around GAP insurance is damaging to all those who sell the product and from our experience, some car dealerships are a great advocate and introducer of the product. Those who sell the product responsibly and within the guidelines of the FCA are, due to the FCA’s sweeping comments, collateral damage by association.
“I haven’t seen an official statement from the FCA on the future of GAP Insurance, other than a confirmation they won’t be banning the product so we are all waiting to see what the FCA does in early February, but in the meantime their language is confusing consumers and having a detrimental effect on the industry as a whole. The FCA needs to come out with a clear statement - and stop regarding car dealerships, lease and finance providers, and online providers like ourselves as one entity - we are not.
“The FCA are claiming they are on the side of the consumer, but by drip-feeding ambiguous statements they are damaging the reputation of a product that benefits thousands of car owners. The FCA claims they want a fair deal for consumers and to offer clarity, but their actions don’t marry up with what they say. "
ALA Insurance expects further comment from the FCA on the future of GAP insurance sales in early February and will comment further when new information comes to light. In the meantime, ALA Insurance hopes the FCA reaches out to experts within the industry, speaks with clarity, and puts consumers first.