New research from GAP Insurance provider ALA Insurance has shed light on the discrepancies between the market value of cars and the amounts that insurance companies are willing to pay out in total-loss claims. The study reveals that Land Rover owners, followed by Mercedes-Benz and BMW owners, are most prone to receiving below-market-value payouts from insurance companies.

The research was sparked by the Financial Conduct Authority's (FCA) order directing major insurers like Direct Line to review their claims history. ALA Insurance's analysis of 3,748 claims since 2016 shows that on average, car owners receive £286 less than their car's market value when making a total-loss claim, adding up to a combined loss of £8.6 billion.

The data, provided by ALA's underwriting partner AMS, shows that Land Rover owners are the most likely to receive the lowest payout when claiming. These owners could have collectively lost out on around £102,438.65 since 2016 with average payouts being approximately £505 less than market value.

Mercedes-Benz and BMW owners are also losing out, with payouts that are £456.71 and £395.18 less than the market value of their vehicles, respectively. However, as this study included drivers with GAP insurance, those individuals were not financially disadvantaged.

On the flip side, Skoda owners appear to be the outliers, receiving, on average, £22 above their car's market value. Other makes like Honda, Volkswagen, and Renault also received initial offers that were less than £100 below their market value.

Alarmingly, only 9% of UK motorists have GAP Insurance. Considering there are 33.2 million cars on the road, experts predict that UK motorists could lose a staggering £8.6 billion combined due to these low initial offers from insurance companies.

Simon England, Founder and Managing Director of ALA Insurance, commented on the findings: "Our data shows the harsh financial reality of payments which are lower than fair market value for drivers who invest in some of the most reliable and highly sought after vehicles on the roads. The stark contrast in the comprehensive insurance company offer versus market value also highlights the importance of GAP Insurance."

ALA Insurance's research indicates that, with an ALA GAP policy in place, claims achieved an average of 101% of the car's market value.

For more information on the significance of GAP Insurance, visit the ALA Insurance website.