GAP Insurance:
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What Is GAP Insurance?
GAP Insurance plugs the often unappreciated hole in your Comprehensive Motor Insurance policy.
The sad fact is that vehicles tend to depreciate at a horrendous rate and it is this ever-depreciating value that would be covered under your Motor Insurance policy in the event of a Total Loss claim.
So, you buy a car and two years later it's declared a Total Loss as a result of an accident, fire or theft. You're left with the inconvenience of having no car, negotiating with insurers and trying to source a replacement vehicle.
To your horror, your motor insurance company offer to payout only 50% of the amount you originally purchased the vehicle for, claiming that this is the current value of the vehicle that was written off.
At this point, your GAP Insurance policy steps in and pays the difference between your Motor Insurance payout and either: the original price you bought the vehicle for (Invoice GAP Insurance); or the cost of replacing the vehicle new-for-old at the time of loss (Replacement GAP Insurance).
Who Can Buy GAP Insurance?
GAP Insurance is available to you if you bought your vehicle from a VAT Registered UK Motor Dealer within the last 105 days.
In addition, the vehicle would have to be less than 105 days old (at the time of buying the policy) in order to buy Replacement GAP Insurance, or less than 6 years old in order to buy Invoice GAP Insurance.
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Your vehicle must not be worth more than £100k and it must be insured on a Comprehensive basis.
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Ideally, you should be the Registered Keeper of the vehicle and also the main insured driver under the comprehensive motor insurance policy covering this vehicle.
How Replacement GAP Insurance works:
