My Car Insurance

Important Secrets To Learn In Order to Protect Your Pocket and Your Vehicle.

Don’t Wait Until It’s Too Late.

• Learn how GAP Insurance prevents a total loss becoming a total disaster.
• Find out how GAP Insurance stops depreciation from burning a hole in your pocket.
• Discover how Gap insurance could end up saving you money.

What is GAP Insurance?

If you are leasing a car, paid for your car using a bank or finance-house loan or simply paid cash, GAP insurance will protect you against depreciation should your motor insurer declare your car to be a total loss through theft or accident. How it does this will be explained to you in this article.

The important thing to understand is that if your car is declared a “write-off” by your insurance company, they will only pay out to the value of your car on the date of loss: this will usually leave a gap between what you first paid for the car, what you may still owe on any financing for it, or what it was worth when you first bought Gap insurance for the vehicle.

How Does GAP Insurance Work?

Imagine your car has been stolen, or you’ve been involved in an accident in which your car is “written-off”, and you need to make a claim on your car insurance. Your motor insurer will declare the car a “total loss” in this instance.

Remember, the settlement they pay will be based on the value of your car at the time of loss – not what it was originally worth!

This is where GAP Insurance protects you. GAP Insurance pays the difference between the motor insurer’s settlement and, depending on the level of GAP Policy selected, the value of your car when you purchased the GAP policy. The most popular form of GAP insurance is called Return to Invoice Gap. This will pay the difference between your motor insurer’s settlement and the price you originally paid. For more details on RTI, VRI, contract hire gap insurance and other types of GAP Insurance Polices see below

Why buy GAP Insurance?

If you plan for the unexpected and buy Gap insurance, it could end up saving you thousands of pounds. If your car is written off by your motor insurer through accident, GAP Insurance is there to help you financially with your dilemma. If you go shopping, out to a restaurant, or if you walk outside your house to find that your car has been stolen – GAP insurance will be there to save the day too!

Many people are unaware of the fact that their car depreciates by about 20 percent as soon as they drive it off the forecourt and that it will continue to depreciate considerably year on year. Cars can depreciate by up to 77%!

Glass’s Guide
The vast majority of motor insurers look to Glass’s valuation service for independent valuations, as they have been a trusted name providing this service for seventy-five years.

GAP companies will also refer to this valuation service to establish an accurate value of your car at the start of the policy and at the point of total loss.

By using this independent service, the GAP Company will ensure the benefit due to you is fairly and impartially calculated.

In the case of Return to Invoice, they will always check that the invoice price shown does not exceed the retail value quoted by Glass’s Guide. If it does, they won’t refuse your claim, instead they will simply apply the retail value in place of the invoice price.

Types of GAP insurance available.

RTV Gap Insurance
RTV Gap policies will pay out the difference between your standard motor insurance payout, and the value of your car when you bought Gap insurance, in the event of your car being stolen or “written-off”.

Example:
Your car’s value is £14,500.
Total Loss car valuation £9,400.
You’re out of pocket by £5,100 – the difference between the value of your car when you buy the Return to Value policy and the amount you receive from your motor insurer.
Your RTV Gap policy pays £5,100!

That’s right; you’ll receive a cheque for £5,100! Depreciation on the car. Think of it as an incredibly valuable top-up to your Motor Insurance.

RTV Gap Insurance is Suitable for Most Car Owners.

• RTV gap insurance can be taken out up to 7 years after buying your car.
• Is available if you’ve owned your car for more than 3 months.
• Can be bought for both private or dealer/broker sourced cars.
• Is available if you paid cash or took out any kind of loan.
• Is also available if you have a contract hire or leasing agreement.
• The car’s value can be up to £50,000.
• This type of Gap is available for cars up to 80,000 miles or seven years old.

Notable Features and Benefits.

• RTV gap insurance provides cover against financial loss in the event of your motor insurer declaring your vehicle an insurance write-off.
• Depreciation is refunded.
• It can pay you up to a maximum of £25,000.
• No maximum mileage limit from the date of purchase.
• Cover available for up to 4 years.
• Money back guarantee. You can cancel and get a full refund if you do so within the first 14 days. The more professional companies increase this to 21 days.
• The comprehensive motor insurance covering the vehicle does not have to be in your name.
• Your total loss is covered when it occurs within Great Britain, Northern Ireland, the Isle of Man, the Channel Islands, member countries of the European community and any other country for which an international motor insurance card (green card) in respect of the vehicle is effective at the date of loss.

Return to Invoice GAP.

If your car is stolen or damaged beyond repair, Return to Invoice Gap Insurance (RTI) pays the difference between your motor insurer’s settlement and your motor dealer’s invoice price.

EXAMPLE:
Amount Paid for Car (Invoice Price) £ 16,000.
Value of your car at Total Loss £ 10,000.
RTI Gap Insurance policy will pay £6,000.
The Depreciation!

When Return to Invoice Gap Insurance Is Suitable.

• For new and used vehicles.
• Vehicles purchased privately or through a trade entity.
• Used for private or business purposes.
• Cash-bought vehicles.
• Vehicles purchased using finance (including but not limited to motor loan, pcp and personal bank loan).
• Cars under contract hire or any style of leasing agreement.
• Cars less than 7 years old and 80,000 miles at the start of the policy.
• The purchase price can be up to £50,000.

Benefits and Features of RTI Gap insurance.

• Provides cover against financial loss in the event of your motor insurer declaring your vehicle an insurance write-off.
• Refunds depreciation.
• Can pay you up to a maximum of £25,000.
• No maximum mileage limit from date of purchase is imposed.
• Cover available for up to four years.
• Cover can be purchased up to 90 days after taking ownership of the vehicle.
• Money back guarantee. Whatever the reason, you can cancel your policy within the first 14 days and receive a refund of your premium in full. You may find that larger companies increase this to twenty-one days.
• Transfer Cover Free for 90 days. Maybe your car doesn’t arrive on schedule, or it needs to be recalled due to a mechanical issue. Look for the companies that offer to transfer the cover to your replacement car free of charge.
• The Comprehensive Motor Insurance covering the vehicle does not have to be in your name.
• Your Total Loss is covered when it occurs within Great Britain, Northern Ireland, the Isle of Man, the Channel Islands, member countries of the European Community and any other country for which an international motor insurance card (“Green Card”) in respect of the Vehicle is effective at the Date of Loss.

Vehicle Replacement GAP
If your car’s stolen or damaged beyond repair, VRI will pay to you the difference between the settlement you receive from the Comprehensive Motor Insurance Policy and the cost of a replacement new vehicle, even if the retail price has increased!

EXAMPLE:
Amount Paid for Car (Invoice Price) £ 14,500.
Total Loss car valuation £9,400.
Cost of replacement new car £ 16,500.

The difference between the cost of a replacement car and the amount your insurer will pay out puts you out of pocket to the tune of £6,800…VRI Gap benefit £6,800! That’s the depreciation and inflation!

Even if the price has increased, the depreciation is paid up to the cost of a replacement car.

When Vehicle Replacement Gap Insurance Is Suitable.

• For new, ex-demonstration and pre-registered cars up to three months old used for private or business purposes.
• Cash-bought vehicles.
• Cars purchased using finance (including but not limited to motor loan, pcp and personal bank loans).
• Covers vehicles bought for up to £50,000.

Benefits and Features.

• VRI provides cover against financial loss in the event of your motor insurer declaring your vehicle an insurance write-off.
• It refunds depreciation and inflation.
• Can pay you up to a maximum of £25,000.
• There is no maximum mileage limit from the date of purchase.
• Three years of cover available.
• Cover can be purchased up to 90 days after taking ownership of the vehicle.
• Money back guarantee. Whatever the reason, you can cancel your policy within the first 14 days and receive a refund of your premium in full. Some of the bigger insurance companies will increase this to twenty-one days.
• Transfer Cover Free for 90 days. Sometimes the car you ordered doesn’t arrive, or the dealer needs to replace it for mechanical reasons. Look for the companies that offer to transfer the cover to your replacement car free of charge.
• The comprehensive motor insurance covering the vehicle does not have to be in your name.
• Your total loss is covered when it occurs within Great Britain, Northern Ireland, the Isle of Man, the Channel Islands, member countries of the European community and any other country for which an international motor insurance card (green card) in respect of the vehicle is effective at the date of loss.

Three Compelling Reasons to Buy GAP Insurance.
Have you considered how you would settle a loan taken out on your car – cars can depreciate in value around seventy percent in the first three years?

Even if your insurance payout covers your loan settlement, where does the deposit come from for your next car? – you don’t have a part exchange!

If you are a cash buyer, have you considered how you will replace the difference between the amount you paid for your car and your insurance payout? Will you have to dip into savings to replace the car on a like-for-like basis?

Where is the best place to buy GAP Insurance?
Without a doubt, the on-line companies provide the most competitive premiums. You should avoid buying from “IT” companies if possible. These companies usually don’t possess the expertise or experience needed to responsibly offer insurance. If you have a claim, they will not be your point of contact.

Likewise, it may sometimes be best to avoid brokers. These companies have only been set up to sell other companies products. You’ll usually find they have a whole range of insurance policies, again their product knowledge may be poor – ask the question if you’re not sure.

A far more discerning choice is to buy directly from the insurer; look for an experienced online company that you are comfortable with in terms of their product knowledge.

If you’re unsure of where to start, try the market leader Click4Gap. They have been around for a long time and offer a comprehensive selection of GAP products… nothing else, just GAP. They are responsible for preparing the policy terms and ensuring claims are settled.

GAP is a very simple product, being one of the few insurance products that does what it says, it: “pays the GAP between your motor insurer’s settlement and the value of your car at the start of the policy”.

When choosing where to buy your policy, ensure the provider is FSA registered. Check that the provider isn’t a broker or IT entrepreneur, that the Insurer is a specialist in motor related insurance. For example, Red Sands Insurance specialise in GAP, Warranty, MOT Insurance, etc. By using a reputable company who know their sector well you can be sure to have your questions answered if you need help when making a claim.

Be wary of misleading statements.
Statements like “we cover you even if your keys are stolen with the car” are inaccurate and misleading. Really?! Let’s look closely at this one…

The terms of all GAP insurance policies will require the vehicle to be classed as a total loss, and settlement paid by the motor insurer.

A total loss will not generally be covered by your motor insurance policy if the keys are left in the car.

Therefore, how does the GAP provider settle a claim where the motor insurer has rejected the total loss? The answer is they won’t. Whether or not a gap policy specifically excludes this in the terms, theft where the keys are left with the vehicle will not be covered. It’s that simple.

If you’re unsure of the GAP provider, just ask them about this one and see if you get an educated answer or a sales pitch.

When would be the best time to purchase gap insurance?
It’s better to be safe than sorry - buy GAP Insurance as soon as you buy your car. You can buy VRI and RTI Gap insurance up to ninety days after delivery, however. Return to Value GAP can be purchased any time for cars up to 7 years old~You can buy RTV Gap any time up until the car is seven years old}.

Just like any insurance we purchase in life – we purchase insurance to protect ourselves in case tragedy strikes, so we are not left out in the cold. Obviously we all hope that we won’t have to use it, but if the worst happened and we did not have it , that would be a disaster. This is why you should get your GAP insurance as soon as possible. Do not wait until tragedy strikes out of the blue. Be safe don’t be sorry.

Remember that different GAP insurance companies may have different terms to abide by so it would be a good idea to check and see what their terms and conditions are before commiting to purchasing a policy.

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