Call us now on 01392 426799

Contact Us
Go To www.skip-hire-insurance.co.uk

What is GAP insurance and do I need it?

What is GAP insurance and do I need it?

Mind the Gap!

 

GAP insurance is a product which is designed to mitigate your loss if you need to make a claim on your car insurance.  It will cover the difference between the amount your main insurer is prepared to pay out and the amount your car is worth in the event that your vehicle is a total loss.  

 

Generally speaking, when your vehicle is written off following an accident, your insurer will only pay you what they consider the market value. This is a particular issue if your car was new as depreciation on new cars is high.  It is estimated that depreciation, depending on the vehicle, can be anywhere between 15% and 35% in the first year and up to 50% of a car’s value over three years. Often in the event of a total loss of a new vehicle, this can leave you seriously out of pocket.  Possibly even more so if you have a finance agreement where you are paying interest.

 

Guaranteed Asset Protection

 

The gap in GAP insurance actually means Guaranteed Asset Protection, although it also means you have cover which literally meets the ‘gap’ between what you paid and what your insurers will pay out in the event of a claim. 

 

Is it right for you?

 

Whether you need GAP Insurance or not, depends on the circumstances. Certainly it is not appropriate in all cases and if you have an older vehicle which has already done most of its depreciating it may not be very cost effective and of limited value.  However, in the case of vehicles between one and three years old – GAP Insurance could prove to be a useful investment in the event of a total loss.  If you have vehicle finance, you may still owe the finance company more than your insurer is willing to pay out – in this case, again, GAP insurance will be invaluable. You will still owe the finance company, even if you no longer have the vehicle so you want to be able to settle the finance with your insurance payout to enable you to replace your vehicle.

 

Always shop around

 

Remember – GAP Insurance is a product which is often sold as an additional product when you buy a vehicle and for that reason, we would advise caution if being offered GAP Insurance through a dealer.  Make sure you get a comparison quote from an independent broker like GM Insurance.  Often, the cost of these policies when sold via a car dealer will be more expensive than it would be if you purchased it direct, as the car salesman will be getting a commission payment from the insurers.   They are also likely to be tied in to a specific product and that may not be the best fit for your circumstance.  

 

For more information on GAP Insurance or to a get a quotation, visit our website at https://www.gm-insurance.co.uk/business-insurance/gap-insurance or get in touch for more information.  We have access to a range of products and are sure to be able to find a policy which suits your circumstances.

Renewal Info


RadDatePicker
Open the calendar popup.
Go

Contact us

Call us now on 01392 426799 or alternatively use the button below to contact us online.

Contact Us