GAP Cover Explained
What is GAP Cover?
Put very simply a GAP policy covers the difference in value between the original purchase price of a vehicle
and it’s depreciated value should it be written off.
This can be due to an accident, or if your vehicle is stolen and not recovered.
GAP Insurance from £123 for 2 Years
Guaranteed Asset Protection insurance, commonly known as GAP insurance, is designed to work alongside your comprehensive motor policy. If your vehicle is involved in an incident which sees it written off, GAP insurance will cover the difference in value between the original purchase price and the depreciated value at the time of the incident.
The implications of having a total loss could be :-
- You may still have a sizable outstanding liability on your financing commitments.
- You may have to make do with a lower specification replacement vehicle as the insurance settlement figure will be based on the value of vehicle on the date of your loss.
Do I Need GAP Insurance?
It’s a well known fact that vehicles depreciate in value the moment they are driven off the forecourt.
If you are involved in an accident or if your vehicle is stolen you would need to make a claim on your main insurance policy. If the vehicle is written off, the insurer will pay the market value of the vehicle at the time of the incident. If it’s 4 years since you purchased the vehicle, this could mean receiving around 45-55% of the original purchase price.
If you originally purchased the vehicle on a finance agreement you could end up in the tricky situation of owing more than the vehicle is worth.
GAP insurance will cover the difference in value between the original purchase price and the depreciated value at the time of the incident.
