Insurers to Stop Selling Car Price Cover After FCA Pressure.

Multiple UK insurance companies have agreed to stop selling policies that cover declining car values after concerns were raised by the Financial Conduct Authority (FCA) about customer fairness. The FCA stated that insurers accounting for 80% of the guaranteed asset protection (GAP) market have agreed to halt sales. GAP insurance is typically sold alongside car finance and covers the difference between the car's purchase price or outstanding finance and its current market value if the vehicle is written off before the finance is repaid. The FCA has found that only 6% of the amount customers spend on premiums for the insurance is paid out in claims, with some firms paying out 70% of the value of insurance premiums in commission. This move follows the FCA's investigation into motor finance, which could result in significant costs for banks. [Extracted from the article]