GAP is an acronym for Guaranteed Asset Protection.
There are also different terminologies used for this cover such as Shortfall Insurance, Return to Invoice, Vehicle Replacement Insurance, Finance Gap, Agreed Value and just plain old GAP.
Actually it is very straight forward. The term GAP covers all of the above. Gap is a depreciation insurance product for motor vehicles, new or used. You insure the difference between the insurance settlement at the point of total loss and an amount that you wish to protect. In the event that the vehicle is declared a total loss you do not suffer a financial disaster.
If you have the misfortune that your car is declared a total loss by your motor insurer (sometimes called ‘written off’), your insurer will offer you a final settlement based on the vehicle’s value on the day of the accident.
This is very unlikely to be the amount that you paid for the vehicle as the insurer will base the settlement on the second hand value of your car at the time of the accident. This limits your options for replacing it.
If you bought the car using finance or contract hire you will be expected to cover the outstanding payments or settle the hire agreement even if the vehicle is written off. Although motor insurance covers you, your insurer’s final settlement is based on the value of the vehicle when it becomes a total loss, and this is rarely enough to cover any outstanding finance payments or settle your obligations.
This is where GAP insurance comes in. You can insure your car or van so that whatever happens you can settle any outstanding finance, or have a sum of money that will buy you a suitable replacement. GAP insurance covers the difference between your insurer’s payment and the outstanding amount needed.
We offer policies tailored to your circumstances, whether you need a simple policy that will just ensure that any finance or contract hire obligations are met or one which will ensure that you are able to replace your car or van with something that meets your needs. You can even choose a policy which will enable you to buy a new vehicle of a similar specification.
The cost of the policy is not influenced by the drivers’ age, driving experience, no claims discount, residential location or the make of vehicle.
In the UK approximately 750,000 vehicles are subject to being written off every year. Ask yourself;
Is it worth taking the gamble in not having GAP insurance when for a small premium you are able to obtain a large amount of protection against unforeseen events happening to you?
Well only your perception of risk can answer that question. Let's look at a typical example of one of Direct Gap’s policy holders:
Mr Jackson bought a new car for £21,000. He had a no fault accident after three years and the car was written off by his insurance company. They pay him an insurance settlement of £11,000. Fortunately for him he had bought an RTI policy for a premium of £108 which paid another £10,000.
The GAP policy payment was issued in five working days.
He purchased a replacement car and came back to us for a new GAP policy on which he received a 10% discount as an existing client!