UK leading Car Gap Insurance
GAP (Guaranteed Asset Protection) insurance is a type of car insurance that covers the gap between the amount you owe on your car and its actual cash value in case it is stolen or totaled in an accident. In the UK, GAP insurance can be particularly useful due to the relatively high depreciation rates of new cars. Here’s a general overview of how GAP insurance works in the UK:
1. **Types of GAP Insurance**: There are various types of GAP insurance, such as Return to Invoice (RTI), Vehicle Replacement Insurance (VRI), and Finance GAP Insurance. Each type offers different levels of coverage depending on what you owe and the value of your car.
2. **Why It’s Useful**: Cars can depreciate quickly, and if your vehicle is written off or stolen, your standard car insurance may only pay the current market value of the car. GAP insurance covers the difference between this amount and what you originally paid or what you still owe on finance.
3. **Purchasing GAP Insurance**: GAP insurance can be purchased from a variety of sources, including car dealerships, direct from insurance companies, or through independent financial advisers. It’s important to compare policies and prices to find the best deal.
4. **Eligibility and Restrictions**: There may be restrictions on eligibility, such as the age and mileage of the car, and whether you have comprehensive car insurance. Also, there might be a limited period after purchasing a new car during which you can buy GAP insurance.
5. **Claim Process**: In the event of a total loss, you would first claim through your standard car insurance. Once that claim is settled, you can claim the ‘gap’ through your GAP insurance provider.
6. **Cost of GAP Insurance**: The cost of GAP insurance depends on factors like the value of your car, the type of policy you choose, and the length of the policy.
7. **Regulation**: GAP insurance providers in the UK are regulated by the Financial Conduct Authority (FCA), ensuring certain standards of service and consumer protection.
8. **Considerations Before Buying**: It’s important to thoroughly understand the terms and conditions of any GAP insurance policy. Check the length of the policy, what’s covered, and any exclusions or limitations.
GAP insurance is not mandatory in the UK, but it can be a wise investment, especially for new, expensive, or finance-purchased vehicles. Always ensure you understand the specifics of the policy you are considering and how it fits with your personal circumstances.
