Assured Asset Safety (GAP) insurance coverage payouts virtually tripled in 2024 when in comparison with three years in the past, in response to new information.
MotorEasy, the car possession and administration answer, stated the claims information evaluation underscores the rising monetary dangers confronted by automobile homeowners as a result of speedy car depreciation, rising new automobile prices, spare elements shortages resulting in insurance coverage write-offs and a surge in car theft.
MotorEasy stated most of the causes of rising GAP payouts might be traced again to the impression of COVID-19.
The pandemic led to a interval of surprising appreciation in used automobile values, however values have been quickly declining since then, significantly for some electrical automobiles (EVs).
Whereas used values have been falling, buy prices for brand spanking new, extra technically superior automobiles have risen, additional rising the hole between the acquisition worth and the present market worth and pushing up GAP insurance coverage claims.
MotorEasy has seen payouts exceed £20,000 for high-spec EVs.
The trade shutdown in the course of the pandemic additionally led to a scarcity of spare elements, the impression of which continues at the moment.
This scarcity, coupled with the extra complicated nature of recent automobiles and the extra expensive elements required for restore, has prompted insurers to put in writing off automobiles extra readily.
This implies homeowners face a bigger monetary shortfall if their comparatively new automobile is deemed a complete loss.
Injury shouldn’t be the one reason for a GAP insurance coverage declare – theft can even result in important monetary loss when a car has depreciated considerably between buy and theft.
Simply over two fifths (41%) for MotorEasy GAP claims over £15,000 have been for stolen Vary Rovers, the place speedy depreciation has exacerbated the monetary loss for homeowners.
