GAP insurance covers the shortfall between what your motor insurance policy pays and what you require if your vehicle is stolen or written off. It can be useful if the current value of your car – and therefore how much your motor insurer pays – is less than you need to purchase a similar replacement, fully repay a loan, or cover leasing expenses. You could recoup such differences.
GAP insurance is formerly known as guaranteed asset protection insurance and it comes in many forms. It is also available for new and used cars. As with any insurance, it is best to check the specific terms of any policy of interest to ensure it meets your needs. Even similar polices from rival insurers can have varying terms. However, we can still broadly define the key types of cover.
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Finance cover
Covers the difference between the motor insurance payout and what you need to repay the loan. You may owe more than the car is worth.
Return to invoice cover
Pays the difference between your motor insurance payout and the precise amount you paid for the vehicle – as stated on the invoice.
Return to value
Covers the difference between your motor insurance payout and the car’s value when you bought it. This is not necessarily what you paid. Perhaps you got a good deal and paid less than market value.
Vehicle replacement cover
Pays the difference between the motor insurance payout and what you need to buy another car of the same make, model, and specification.
Lease cover
Covers the difference between the motor insurance payout and any costs associated with the lease. Early payment charges, for instance.
Where to buy GAP insurance
GAP insurance can be bought via our partners at MotorEasy which offers up to 75% savings on dealer GAP prices.
Cost of GAP insurance
As with any insurance policy, what you pay depends on numerous factors. They include the value of the car, the length of the policy, precisely what is covered, the size of any excess, and whether you pay via fixed monthly instalments or a single lump sum.
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How to claim
Insurers vary, so check your policy’s terms and conditions to confirm the claims process. The likely starting point is to ask your motor insurer what it plans to pay toward the loss of your vehicle. The GAP payment cannot be defined without this figure. Be careful, though. The GAP insurer may want to give its blessing before you actually accept an offer from the motor insurer. There may also be a time period beyond which you cannot make a GAP claim.