Insurance GAP Insurance
GAP Insurance
A policy which insures you for the difference between
insurance write off value and total loan value to be repaid
- covers
the GAP. GAP (Guaranteed Asset Protection)
or Shortfall Insurance will
put your mind at rest,
how it works:
For a small premium, GAP insurance will pay off
outstanding finance - after your insurance company have
agreed the write off value, to a maximum claim of 10,000.The period options are 12 to 60 months.
The fact is that if your vehicle is written off it is likely that your motor insurance would only pay you the market value of your vehicle at the time it was written off. This could leave you in one of three situations:
- Possibly not being able to afford to replace the vehicle with a new equivalent (Replacement GAP)
- Not getting your original invested amount back (Invoice GAP)
- Not being able to clear the remaining outstanding finance for which you would still be liable (Finance GAP)
Replacement GAP
If your car was written off by your Motor Insurance company they will normally pay you what they deem to be the market value of our vehicle at the time it was written off. You can almost guarantee that this will be less than the original price that you paid for the car, but in addition it's likely that since you bought your car, to buy the equivalent brand new replacement model today, it's probably more expensive than you originally paid. In this event, this Replacement GAP policy will pay you the difference between your Car Insurance payout and the cost of replacing the vehicle New for Old to the same or equivalent specification even if the replacement vehicle is more expensive than you originally paid.
Finance GAP
If you bought your car via a HP agreement and it is written off before you have finished paying for it, it is possible, depending on how much of a deposit you left, the interest rate you borrowed the money at, and the term of the loan, that the amount your Car Insurance will pay you as the market value of the car at the time of the claim, will not be enough to settle the outstanding finance. In this event, this Finance GAP policy will pay you the difference between your Car Insurance payout and the outstandin
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