Every motorist should be aware of GAP insurance and how it can benefit both you and your vehicle. If you were involved in an accident and the car was written off, or the car was stolen and never recovered, your insurance provider would only pay the current market value. GAP insurance covers the gap between this amount and the amount originally paid, which could be thousands of pounds as a result of depreciation.
Types of GAP Insurance
Keep in mind that a new car loses around a third of its value after just one year, it is clear that this is a type of cover that needs to be considered particularly those buying new cars. You also need to be aware that there are a few different types of GAP insurance that are available and you need to know your options:
Vehicle Replacement Insurance: Covers the cost of a brand new replacement with the same spec as the vehicle written off.
Return to Invoice: Covers the difference between the payout and invoiced price of the vehicle when purchased.
Return to Value: Covers the difference between the payout and value of the vehicle when the GAP insurance policy was taken out.
Finance GAP Insurance: Covers the amount that is outstanding on a finance agreement so that you are not in debt.
What is Not Included
As with any kind of insurance policy, no two are the same and you always need to read the small print. You also need to be aware of what is not typically involved in a GAP insurance policy. Usually, this will involve exclusions such as not being eligible if you do not have a fully comp insurance policy, modification not being covered and not being able to claim if your insurer does not payout.
Why It Should be Considered
GAP insurance is a sensible type of cover that every motorist should consider. It makes a lot of sense for many people, such as those that buy new or take out a lease, but every motorist can benefit from having protection in place. The roads can be dangerous and accidents can happen, plus you will find that car crime is a growing problem in the UK. Additionally, having a GAP insurance policy in place can also provide reassurance and help you to feel more confident when behind the wheel.
Hopefully, this article will encourage you to take a closer look at GAP insurance and to protect yourself and your vehicle. This is an optional type of cover but one that could save you thousands of pounds in the event of a write off due to depreciation. GAP insurance will also give motorists peace of mind knowing that they have a safety net in place and will not find themselves in a difficult financial situation if they get in an accident or the car is stolen.
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