I recently renewed the classic car insurance on my much loved 1991 Nissan Figaro through Sterling Insurance, who offered the most competitive price for a non-agreed value policy, which I had to go with for several reasons. I have no issues with the policy, but a few days after the policy was confirmed, I had an email asking if I wanted an agreed value:

Have you considered an Agreed Valuation?

If your car was written off, how much would you be paid? Depending on your vehicles condition, the listed Market Value may not reflect its true value that could be reached if you were to sell it. Therefore in the event of a Total Loss you could be left with a shortfall.

We offer Agreed Values from just £15 which pays the amount we state on the Valuation Certificate.

Benefits Include:

  • Provides cover if your vehicle is lost, stolen of damaged beyond economical repair.
  • The policy pays the difference between the total loss settlement paid by your motor insurer and the agreed value of your vehicle.

How to take advantage of this benefit
Simply call our Customer Service team, they will confirm the cost and arrange for the application to be issued to you

The admission that the market value on the policy might not match the price it could potentially sell for caught my attention, as did the second stated benefit. Shortfall cover suggests that the agreed value policy is a GAP-style add-on to the standard policy which pays any shortfall in settlement figure, much like traditional GAP insurance (short for Guaranteed Asset Protection) covers the shortfall between a write-off settlement and a finance settlement, which can often be much higher when we factor in interest plus settlement costs.

About Sterling Insurance

Sterling is part of Covéa Insurance, which is a subsidiary of the French insurance company, Covéa. The UK operation was formed when Provident Insurance, MMA Insurance and Gateway Insurance merged in 2012.

Provident Insurance was established in 1996 and built a good reputation within the UK, specialising in motor insurance policies for women drivers, the owners of old or second hand cars, vans, and insurance that was less than comprehensive.

In 2011, Provident was bought by the French mutual insurance company Covéa (or Société de Groupe d’Assurance Mutuelle Covéa, to give it its full title). Covéa was the leading liability and property insurance specialist in France, with an estimated 11 million policyholders and an income from premiums amounting to some €14 billion. Covéa Insurance posted an £87.3m loss after tax for 2023 with underwriting losses across commercial, personal and speciality lines.

nissan figaro agreed value insurance UK

GAP Insurance Suspension 2024

In February 2024, The Financial Conduct Authority (FCA) announced that multiple insurance firms had agreed to pause sales of GAP insurance, following a request from the FCA. The various firms accounted for 80% of the market.

This action followed findings in the FCA’s latest fair value measures data, showing that only 6% of the amount customers paid in premiums for GAP insurance was paid out in claims. Meanwhile, the FCA had seen examples of some firms paying out 70% of the value of insurance premiums in commission to parties involved in selling GAP policies.

Under the FCA’s Consumer Duty regulations, insurance companies and other financial firms must provide fair value to customers, ensuring that products and services meet their needs, and provide good customer service. The Duty requires firms to put customers’ needs first. Some GAP policies have since been re-introduced but, as someone who trained as a Motor Trade Business Manager (finance and insurance salesman) back in the 1990s and used to sell GAP insurance once upon a time, it is a not a product I am overly comfortable with.

Key components of Classic Car Agreed Value Insurance

Agreed value classic car insurance is typically more expensive than standard car insurance policies because it pays out a set amount. The policy pays out an ‘agreed value’ in the event of a claim where the vehicle is written off or stolen and not recovered. Policyholders know how much the insurers will pay out because it’s already been agreed.

If your vehicle is rare or unusual, or in better condition than similar models of a similar age – and worth more than the market value – you should always opt for agreed value cover and make sure the policy has salvage rights.

While an agreed value insurance policy is the only thing I recommend for cherished classic cars, I can’t say the same for Agreed Value add-ons with a flavour of GAP insurance, unless there is no other way to get an agreed value. Shortfall insurance of any kind is not my option of choice. My advice is to build all your classic car insurance protections into one policy.

Classic Car Valuations Specialist provides online valuations for insurance, buying, selling or HMRC import purposes for classic and collector cars of all ages. You can order an insurance valuation, pay and upload photos using our online classic car insurance valuations form. Contact us with any questions.

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