Gap insurance covers the difference between a car’s purchase price or the amount of finance owed on it and its current market value in the event that the car is written off before the finance has been repaid. Further, the FCA said it had seen examples of some firms paying out as much as 70% of the value of insurance premiums in commission to parties involved in selling Gap insurance policies. Three months later, in May 2024, the FCA announced that firms that had reduced their commission payouts had been permitted to restart sales of Gap insurance. Today, with Gap insurance once again freely available, companies selling such cover say that car buyers can’t afford not to have it. Motoreasy – a company that sells Gap insurance, charging around £192 for a three-year policy – says its average claims payout has more than tripled in three years, from £1587 in 2021 to £5559 in 2024.