VITAL GAP INSURANCE SUSPENDED BY 80% OF PROVIDERS: How can dashcams help bridge the insurance void?

Gap insurance, or Guaranteed Asset Protection insurance, covers the difference between a vehicle's purchase price and its depreciated value at the time of a claim. It's designed to protect car owners from financial loss if their vehicle is written off or stolen.

However, the sale of new Gap insurance policies was paused in February this year due to concerns from the Financial Conduct Authority (FCA) about fair value. This suspension left a significant gap in the financial protection available to car owners and put additional strain on car dealerships already facing pressure.

Anthony Hogan, Automotive Business Development Manager for Road Angel, highlighted how dealerships are adapting to these changes. With the suspension of Gap insurance sales, dealerships are increasingly offering pre-installed dashcams as an alternative.

These dashcams provide several benefits:

• Insurance Premium Reductions: Many insurance companies offer lower premiums for vehicles equipped with dashcams, as footage can expedite the claims process.

• Convenience for Customers: Buyers can avoid the hassle of sourcing and fitting a dashcam post-purchase.

Taxi firms are particularly affected by the Gap insurance hiatus. Traditionally, acquiring Gap insurance for taxis had already been challenging due to high mileage and rapid depreciation.

Talking of how some dealerships are including pre-installed dashcams, Hogan said: “The motorist further benefits from insurance premium reductions as more and more insurance companies offer reduced prices for customers that have a dash camera fitted to their vehicle, as the inclusion of footage with a claim significantly speeds up the claims process.

“These benefits also apply to commercial vehicles including taxi companies who we are seeing come to Road Angel in increasing numbers looking for ways to bridge the insurance coverage gap.

“Taxi-specific gap insurance has always been more difficult to buy due to traditionally higher mileage and the faster depreciation of vehicles used as taxis.

“We can offer competitive dashcam prices to taxi companies which means the drivers get easy access to affordable cameras, while the taxi companies also benefit financially and have the peace of mind that their drivers are protected.

“While there are signs GAP insurance is starting to be made available again for dealers to sell to customers, it isn’t clear at this stage in what form the insurance will be reintroduced and whether sales will return to 2023 levels.

“In an increasingly challenging market for both dealers and motorists, expanding the range of safety products, such as dashcams, being made available to consumers at the point a vehicle is purchased will protect the financial interests of dealers, provide a convenient safety solution for consumers and help keep UK roads safe.

“Whatever form GAP insurance returns into the UK automotive market, we expect dealerships to continue to broaden their safety product offering for the benefit of the dealer and the motorist.”