Has your GAP insurance underwriter gone bust?

There’s a reason that we don’t pursue the cheapest possible prices at all costs – sure, policies from A-rated insurers may well attract a higher premium but, crucially, they’ll almost certainly be there when you need them most!

October 2016 – Enterprise Insurance (Gibraltar)
August 2017 – Elite Insurance (Gibraltar)
May 2018 – Alpha Insurance A/S (Denmark)

…and more recently…

December 2018 – Qudos Insurance A/S (Denmark)

Each of them being unrated, offshore, underwriters lauded at different times by various competitors of ours as the next-best-thing in terms of insurer of GAP insurance… and all since having gone to the wall.

The latest news RE: Qudos
Denmark Domiciled ‘Qudos Insurance A/S’ has now been declared bankrupt

In the UK, Qudos provided a range of insurance products including, GAP insurance (they also did motor insurance, tyre & alloy wheel insurance, scratch & dent insurance as well as pet insurance and accident, sickness and unemployment insurance)

Qudos have recently announced that all live policies are to be terminated three months after the notice of the bankruptcy decree (a message repeated in this post from the UK’s FCA). Although confusingly, this announcement from Qudos claims that all live policies will be terminated as of November 2019

The announcement from Qudos explains further that claims are to be covered by the Danish Guarantee Fund, but only up until June 20th 2019 after which any claims will be against the bankruptcy estate

The announcement goes on to say that the ability to claim a refund of premium paid for the policy will be online from February 2019.

The UK’s Financial Services Compensation Scheme has published these guidelines about the failure of Qudos.

What should you do if have a Qudos underwritten GAP insurance policy?

We know of at least two of our online competitors who were selling GAP insurance policies underwritten by Qudos, within the last 12 months so your options are potentially quite limited because most GAP insurance providers have a time limit within which you have to purchase GAP insurance and not many will allow a new policy to be purchased more than 6-months after taking ownership of the vehicle.

Thus, your options would be..

  • Do nothing – and keep your fingers crossed that you don’t need to make a claim in the future (for the avoidance of doubt, we’re not really serious that this should be considered a valid option)
  • Seek a refund (possibly a transfer to a new insurer) from your original broker – We don’t think any of their policies were sold in the last 30 days so you’re likely to be well outside of your 30-day cooling off period and unable to get a 100% refund but you should initially speak to the company you purchased the policy from originally and see what they can do for you. It might be that they’re willing to refund you (pro-rata or otherwise) and be able to arrange cover with a new provider. The above announcement from the FSCS suggests that your broker may well be able to claim from the FSCS a portion of the refund due to you, and use that against the cost of a new policy from a new provider. However, we believe it’s also possible that they may just refer you to the online facility which Qudos will be putting live in February 2019 though.
  • Seek cover elsewhere – We (for example) sell GAP insurance underwritten by large, reputable, A-rated insurers and at present can provide cover up to a year after you took delivery of the vehicle. This is for a limited time though because from January 22nd onwards we’ll only be able to provide GAP insurance for a vehicle you purchased within the last 90 days.

It should be worth noting that the FSCS will only cover you for up to 90% of any claim value or, in the event of cancellation of your policy, up to 90% of any refund of premium that you are due as a result. Consider those sums for a minute… and take action sooner rather than later in order to at east try to ensure that you maintain some kind of cover in place!

Obviously, you need to have this out with the original broker that you sourced your policy from first. After doing so, if you want to have a chat about your options for cover from a reputable A-rated insurer, feel free to contact us on either 01484 490095 or email support@gapinsurance.co.uk.