“The net result of lower valuations is that the policyholder gets a lower redemption figure for their vehicle than they would have done last year so our GAP claims are higher,” explained Jackson Lee Underwriting joint managing director Nick Mohan.
The firm noted that CAP valuations on average are 5-10% lower than the values produced by Glass’s or Parker’s guides. It added that in 2017 it doubled the average increase per claim – from £167.54 to £330.57 – that it was able to negotiate from insurers.
“We have been able to negotiate up the claims settlement figure for our clients, but for those without a GAP policy they will be feeling the full impact of insurers’ decision to lower average valuations,” said Mohan. “It appears that Glass’s and Parker’s guides are losing favour with engineers and insurers because they no longer accurately reflect the value and range of available manufacturers’ added extras on new vehicles, and also over-value used vehicles overall.
“Some insurers will also use a combination of guides, which is perfectly acceptable by the ombudsman, but this also tends to present lower motor valuations.”