Consumer refuses replacement car and claim is rejected

Motor Insurance

When Tarik’s car was written off, he thought he could opt for the money instead of a taking replacement car, but his GAP insurer wouldn’t meet his claim.

What happened

Tarik had his claim rejected on his Guaranteed Asset Protection (GAP) insurance policy after his car was written off. His insurer told him they wouldnt meet the claim as he had been offered a replacement car by his motor insurer. Tarik had refused this and wanted the money instead, which the GAP insurer refused. 

He didnt think this was fair, so contacted us for help. 

What we said

We spoke to Tariks car insurer to confirm whether a replacement car had been offered. They confirmed that they had, but Tarik had rejected this. His finance provider also confirmed that they would have transferred the finance to the new car. 

When we checked the policy wording, we found it said the policy wouldnt pay if the policyholder refused a replacement car.

We explained to Tarik that the GAP insurer could refuse to deal with the claim. This is because his car insurer had offered to provide a new car, and if hed accepted this, he would not have been out of pocket. 

We told Tarik we didnt think the insurer had treated him unfairly. We explained it would be unfair for the GAP insurer to have to pay when there wouldnt have been a loss to him if hed accepted the replacement car.