What is GAP Insurance and Do You Need It?
There is one type of insurance that the majority of motorists do not own but one which certainly needs to be considered. This is GAP insurance which is an optional insurance policy which could save a motorist thousands of pounds if their vehicle is ever written off either through an accident or if it is stolen and never recovered.
Most motorists assume that their comprehensive insurance provider would payout enough to cover the cost of the vehicle but this is not strictly true. In the event of a write-off, a comprehensive insurance provider would only payout the current market value of the vehicle. Depreciation can be as much as 35% after just 1 year and upwards of 50% after three years so you could be significantly out of pocket and struggle to afford a replacement vehicle or to pay off the finance agreement.
GAP insurance, meanwhile, will cover the shortfall between the insurance payout and the new market value of the same model or the amount outstanding on the finance agreement. This could save you thousands of pounds and it is particularly worthwhile if your car was new when you first purchased it. There are usually a few different policy types to choose from so you should always take your time to research each one and find the right one for your particular needs.
It is unfortunate, but accidents that result in write-offs occur frequently on the roads and these can often not be the fault of the driver whether it is the result of difficult driving conditions or a negligent driver. Additionally, car crime is on the rise in the UK and these cars can be hard to recover which would result in the car being deemed a write-off. Therefore, GAP insurance is a smart investment to make especially if you have the car on finance, it was new when you bought it and if it depreciates in value quickly.
You are often offered GAP insurance when you buy a car from a dealership but you are much better off purchasing from a specialist provider. This is because you will benefit from the best deals, fewer exclusions and a better customer service. Additionally, there are likely to be more policy choices to choose from so you can find the right level of cover for your particular needs.
Most motorists do not have a GAP insurance policy in place which is dangerous and could leave a nasty surprise if they get into an accident or if their vehicle is ever stolen. The roads can be dangerous and unpredictable and a GAP insurance policy ensures that you won’t find yourself seriously out of pocket if your automobile is ever written off.