Pay-outs more than £1m shy of market value

New research by GAP insurance provider ALA Insurance has revealed that the average car owner is offered £286 below market value on claims where their car has been written off.

ALA analysed over 3,748 claims to show which car makes receive the lowest pay-out based on market value and found that, collectively, pay-outs were less than £1m on market value.

Land Rover drivers suffered most, receiving pay-outs on average £505 below market value, while Mercedes-Benz drivers received pay-outs on average £456 under market value.

Skoda drivers were the only ones to receive a positive financial offer – £22 over market value.

The research also revealed that only nine per cent of motorists take out GAP insurance, with ALA warning that drivers who don’t take out these policies in danger of losing up to £8.6bn in pay-outs.

ALA founder and managing director Simon England said: “We felt it was pertinent to investigate the difference between insurance offers versus the market value of our vehicles following the FCA’s order calling major insurers to review their claims history. Our data shows the harsh financial reality of payments which are lower than fair market value for drivers who invest in some of the most reliable and highly sought after vehicles on the roads.

“The stark contrast in the comprehensive insurance company offer versus market value also highlights the importance of GAP Insurance. From our research we know that where customers had an ALA GAP policy in place, claims achieved an average of 101% of the market value.”