GAP - ALA vs Others

[nordberg]

It's a total minefield. I'm having a 'mare....

I took out Vehicle Replacement Insurance with ALA a month ago. I subsequently discovered that with their VRI, if you make a claim and decide you would like a different vehicle, ALA will give you a cash payment, but only based on the RTI (invoice) figure. I wasn't/am not happy about this as it obviously then limits you to either the same car again or a potentially inadequate amount of cash if you bought your vehicle at a discounted figure.

The scenario is this:
 

• I buy a £42k car but I only pay £32k for it. Therefore, I need VRI as RTI would potentially leave me short.
• My car, now valued at £15k, is written off, I need to make a claim. My GAP provider offer me another identical car delivered to my door
• I tell them I would like an Audi next, please can I have the cash instead. They offer me a cheque for £17k. I was expecting a cheque for £27k......

I spoke with ALA about this and the asserted that all GAP works this way. They claim, if I was to get a cheque for £27k I would be in receipt of "issue of betterment" which is in breach of various insurance/financial regulations.

I put this to Frank Pickles who tell me it's rubbish and something ALA have dreamt up.

So, I set out to cancel my ALA policy today, and haven't. I don't know who to believe and I can't seem to find any independent advice on it....

I don't suppose there's any insurance ombudsmen in the Tyresmoke ranks is there??!!

[NewNiceMrMe]

Are you intent on torching it or something? 

 

It seems like a hell of a lot of hassle when you know you'd get a replacement car of the same you bought, and you're working on the basis that you might like another make instead!

 

So first the car has to be written off, and then you have to want another car entirely.  Isn't it a bit too like trying to predict the weather in France if you're going to Tenerife, but might change your mind when you're there so you want to know what it'll be like in France just in case?

[Booster]

Never had any issues getting payment from Ala for clients making a claim from them. That said, I am just about to use (next week in fact) Frank Pickles for my wife's new car. FP do seem incredibly professional and have been in the game a long time.

[nordberg]

Are you intent on torching it or something? 

 

It seems like a hell of a lot of hassle when you know you'd get a replacement car of the same you bought, and you're working on the basis that you might like another make instead!

 

So first the car has to be written off, and then you have to want another car entirely.  Isn't it a bit too like trying to predict the weather in France if you're going to Tenerife, but might change your mind when you're there so you want to know what it'll be like in France just in case?

 

I don't agree. Three years down the line and I might have fallen totally out of love with my current car and want something different. How may people do you know who always buy the same model car when they change?

[nordberg]

Never had any issues getting payment from Ala for clients making a claim from them. That said, I am just about to use (next week in fact) Frank Pickles for my wife's new car. FP do seem incredibly professional and have been in the game a long time.

 

They've been selling general insurance for a long time, but only selling gap for a year or so.... But I agree, they do seem very good and they're only a few miles from me so any problems I can call around and make a fuss

[Mac]

You cannot insure for something you never had - that's the betterment bit.

 

You paid 32k for it, the fact that it was measured at 42k is irrelevant. Now, if you paid 42k for it, but then they gave you back 10k through some other means, then you'd be in a better position.

 

Car valued @ 15k and then written off, to return you to the point you were at financially is 17k, not 27k for the mythical 42k.

 

Imagine if you could do that - buy 32k vehicle, insure, burn, whoop, quids in.

Edited March 26, 2014 by Mac

[cabby]

You cannot insure for something you never had - that's the betterment bit.

 

You paid 32k for it, the fact that it was measured at 42k is irrelevant. Now, if you paid 42k for it, but then they gave you back 10k through some other means, then you'd be in a better position.

Really? Surely market value is more relevant that what you think it's worth or what you pay for something? Extreme example being you are gifted something then it's stolen/written off. The fact you paid zero for it is irrelevant.

[nordberg]

You cannot insure for something you never had - that's the betterment bit.

 

You paid 32k for it, the fact that it was measured at 42k is irrelevant. Now, if you paid 42k for it, but then they gave you back 10k through some other means, then you'd be in a better position.

 

Car valued @ 15k and then written off, to return you to the point you were at financially is 17k, not 27k for the mythical 42k.

 

Imagine if you could do that - buy 32k vehicle, insure, burn, whoop, quids in.

You are basically confirming what ALA have told me...and contrary to what Frank Pickles and Car2Cover have told me.... However, see below....

:

Chat Transcript from Car2Cover:

Matt: I have read your policy details for VRI Gap and I have a question

Let's say I make a gap claim and I prefer a cash payout

If I have VRI Gap rather than RTI Gap,

What figure will the shortfall be based on?

The invoice price of my car, or the replacement cost of the car.

car2cover: Return To Invoice Gap settles on the invoice price, but if you opted for the Vehicle Replacement Gap that settles on the cost of a like for like replacement car......

Our VRI policy does not physically replace the car for you (as we have seen many circumstances where the policy holder does not want the same car) - so the shortfall is paid to the policy holder.

Matt: OK - even though that figure would potentially be considerably more than the value I originally paid?

car2cover: Yes, VRI is designed to cover price increases - so potentially could cover more than the original invoice price you paid.

Matt: OK - that's very helpful. Thank You

[nordberg]

Really? Surely market value is more relevant that what you think it's worth or what you pay for something? Extreme example being you are gifted something then it's stolen/written off. The fact you paid zero for it is irrelevant.

That is the argument Frank Pickles made; Replacement means just that - the means to replace your vehicle with an equivalent model irrespective of the figure you originally paid....

[CarMad]

VRI probably works on a new car but for me I'm not sure if does on a used as its value is very subjective, but I can see it being useful when new. 

 

I'm hoping not to claim with Ala but its there as a safety net if I do have to. 

[nordberg]

VRI probably works on a new car but for me I'm not sure if does on a used as its value is very subjective, but I can see it being useful when new. 

 

I'm hoping not to claim with Ala but its there as a safety net if I do have to.

VRI is only available on new cars....

[CarMad]

See told you it wouldn't be any good didn't I.  

[NewNiceMrMe]

I don't agree. Three years down the line and I might have fallen totally out of love with my current car and want something different. How may people do you know who always buy the same model car when they change?

 

I don't dispute that, but you're working on the scenario of not only that, but the vehicle being written off at the stage too.

[jimdiesel]

You will still be up financially in the case of a total loss, rather than you selling and moving on, and realistically this is the best you can achieve.

[nordberg]

I don't dispute that, but you're working on the scenario of not only that, but the vehicle being written off at the stage too.

 

I'm working on the basis of me purchasing gap insurance in the first place with the added flexibility of being able to choose a different car of the same value. I don't think that's unreasonable....

 

You will still be up financially in the case of a total loss, rather than you selling and moving on, and realistically this is the best you can achieve.

 

Of course - but there's a big difference between being paid VRI value and RTI value. I want to be 100% clear on that figure and, with ALA, it's far from clear unless you ask the very specific questions.