Many motorists don't consider the possibility that their car could be written off or stolen. If it is, car insurance companies will usually only reimburse you the value of your car at the time it was declared a total loss and written off due to accident or theft. This could leave you having to downgrade to get a replacement and owing money to your finance company or both. GAP Insurance fills in the difference between what your insurance company will pay and how much the car was worth at the time you bought it or took out the policy.
Why do you need GAP Insurance?
Car theft is at a three year high, seeing a 30% increase after reaching record lows in 2014, as keyless technology and anti-theft devices deterred criminals. Now however criminals have worked out ways of getting around these security systems leading some car owners to go back to old fashioned steering wheel locks. So if some unpleasant person decided they liked the look of your car and it wasn't recovered your GAP Insurance policy would ensure you could replace your car with one of the same value, possibly identical, by topping up your insurance pay out.
But, what if your car is written off in an accident? The same would apply, if your insurer has paid you what the vehicle is currently worth, your GAP Insurance policy would be able to get you back on the road in a similar if not the exact same car.
What GAP Insurance cover is right for you?
Vehicle Replacement Insurance (VRI) covers new vehicles with under 500 recorded miles when you buy it, where you're the first registered owner and the car was bought outright. This cover will pay-out the difference between your motor insurance settlement and the current replacement price of a vehicle matching the make, model, age, mileage, specification and overall condition of your vehicle at the policy start date.
Return to Invoice (RTI) covers new or used cars purchased within the last three months whether they were bought outright or on finance. This cover will pay the difference between your insurer's payout and the amount you originally paid for the vehicle, or the remaining balance on your finance agreement whichever is the greater amount. It's important to note here that even if your car is brand new it will be covered under RTI rather than VRI, if you have purchased it on finance.
Return to Value (RTV) covers used cars purchased from a trade seller more than 3 months ago or at anytime from a private seller. This policy will cover the difference between your insurer's payout and the original value based on the cars valuation at the start of the policy.
If this all sounds a bit confusing, just put all your car details into MotorEasy's quote process and we'll work out the right cover for your car so that you don't have to.