The Financial Conduct Authority (FCA) has recently announced that it has approved the resumption of Guaranteed Asset Protection (GAP) insurance sales for firms. This decision comes after a temporary ban on the sale of GAP insurance was put in place in May 2020 due to concerns about the impact of the COVID-19 pandemic on consumers.
GAP insurance is a type of insurance that covers the difference between the amount owed on a car loan or lease and the actual cash value of the vehicle in the event of a total loss. This type of insurance can be particularly important for consumers who have financed their vehicles and may owe more on their loan than the car is worth.
The FCA’s decision to allow firms to resume selling GAP insurance comes after a review of the market and consultation with industry stakeholders. The regulator has stated that it believes that the market for GAP insurance is now functioning effectively and that consumers are able to make informed decisions about whether to purchase this type of insurance.
However, the FCA has also emphasized the importance of firms ensuring that they are treating customers fairly and providing clear and transparent information about the costs and benefits of GAP insurance. The regulator has stated that it will continue to monitor the market closely and take action if it identifies any issues that could harm consumers.
Consumers who are considering purchasing GAP insurance should carefully consider whether this type of coverage is right for them. While GAP insurance can provide valuable protection in certain circumstances, it is important to weigh the costs against the potential benefits and consider whether there are other ways to protect against financial loss in the event of a total loss of a vehicle.
Overall, the FCA’s decision to approve the resumption of GAP insurance sales for firms is a positive development for consumers who may benefit from this type of coverage. However, it is important for consumers to carefully consider their options and make informed decisions about whether to purchase GAP insurance based on their individual circumstances.
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- Source: https://zephyrnet.com/fca-gives-firms-the-green-light-to-resume-selling-gap-insurance/