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The 
Financial Conduct Authority (FCA) is proposing a shake-up of GAP insurance.
The FCA announced a market investigation into add on insurance, including GAP, in July 2013.
It found poor competition, low levels of claims and consumers potentially being overcharged by up to £200m each year for products that they may not need or use.
It said just 10% of policy holders claimed on GAP insurance compared to 64% for personal insurance, including motor and household insurance.
The FCA is proposing
* Imposing a requirement that asks customers who purchase GAP insurance as an add-on to confirm that they want the product in the days following the sale of the primary product
* Banning pre-ticked boxes to ensure consumers actively choose to buy an add-on and are clear when and how they are purchasing a product.
* Requiring firms to publish claims ratios to highlight low-value products, pressuring providers to deliver better value to their customers.
* Improving the way that add-ons are offered through price comparison websites, including how and when they are introduced.
The FCA is asking for comments on its report and proposals by 8 April 2014.
Christopher Woolard, director of policy, risk and research at the FCA, said:
“There’s a clear case for us to intervene. Competition in this market is not working well and many consumers are simply not getting value for money. Firms must start putting consumers first and stop seeing them as pound signs.
“We believe our proposals will address these issues and prevent consumers paying for poor-value insurance products that they may not need or use.”