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GAP Insurance Recommendations Please


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1. Normally if you buy a brand new car your comprehensive insurance will replace your car if it's a write off in the first 12 months - after that you will get market price.

 

2. Dealing with the GAPP insurance claim was really hard work - but they did settle eventually.  You will need to return loads of information before they pay out. 

 

 

Hi SollyRed,

 

A couple of things in response to your post that may be of interest to you or indeed anyone else considering GAP insurance:

 

1. Some Motor Insurers do indeed cover a brand new vehicle on New-For-Old basis during the first year and the theory is that if the vehicle is written off they will physically replace it with a new equivalent however, not all do and, of those that do, some of their specific criteria (which many people will only pay a passing glance of attention to prior to needing to use it) can be so stringent that it becomes extremely difficult to actually benefit from a New-For-Old replacement at the time of claim with Market Value payouts (and therefore a need for GAP insurance) still featuring within the first year.

 

It's very important that if you're considering forgoing GAP insurance in the first year, you should fully understand what you're letting yourself in for in terms of your Motor Insurance policy and the cover that they provide.  We produced this blog post a while ago now to assist in terms of what to look for from your Motor Insurance policy to at least attempt to ensure that their New-For-Old cover will do what you think it will do.

 

Ultimately, if you're happy with the cover provided by your Motor Insurer then we (and any other decent GAP insurance provider) will work with you and permit you to either:

 

a. Buy Invoice or Replacement GAP insurance up to a year after purchasing your vehicle or

b. Buy Invoice or Replacement GAP insurance sooner, but with the option to defer the start date of the policy by up to a year from the date your vehicle was first registered.

 

This way you can avoid duplicate cover in the first year but still benefit from cover in later years (most providers only permit you to buy GAP insurance within up to 6-months of taking ownership of the vehicle).

 

 

2. It always frustrates me when I hear of GAP insurance claims taking ages, (often with the GAP insurance policy/provider being slated as a result), because in the vast majority of cases a GAP insurance claim is (or at least should be) absurdly straight-forward!  For example in our case, in order to pay out on a GAP insurance claim we'd need to see:

  • A copy of the original vehicle sales invoice and (if applicable) details of any finance agreement secured on the vehicle and the settlement figure required at the time of claim.
  • Evidence that the driver (if applicable) was eligible to be driving the vehicle (Driving Licence and Insurance etc) at the time of the incident that led to the vehicle being written off
  • Details of the incident that led to the vehicle being written off by the Motor Insurer (including crime reference number if applicable)
  • A copy of the letter detailing the Motor Insurer's settlement offer
  • Evidence (if Replacement GAP) of the replacement cost of an equivalent vehicle.

With all of the above in order (which should normally be pretty straightforward to collate though granted, sometimes there can be a delay with policyholders acquiring copies of since lost paperwork), other than the GAP Claim Administrator possibly needing to get the payout signed off by the insurer (there'll be a limit to the amount of money the claim administrator can payout without needing to refer it on to the insurer for approval) there should not really be any delay in proceeding to settlement relevant to the cover provided.

 

Problems usually arise due to the Motor Insurer not releasing/sharing details of the claim to/with the GAP insurance claim administrator, or the motor insurer dragging their feet over settlement which, giving them the benefit of the doubt, can sometimes be out of their hands - we had a claim last year when the vehicle was the subject of a criminal investigation (it had been stolen and used to commit a crime which sadly involved a fatality) which meant that the police wouldn't release the vehicle to the motor insurer and the motor insurer was refusing to pay out (nor give any indication that it would be a Total Loss claim or the amount they might payout) until the police had confirmed they were releasing the vehicle... without knowing how much the motor insurer were going to be paying out, the GAP insurance couldn't pay out either. If I remember correctly it was something like 6-months after the event when the Motor Insurer eventually paid out on a Total Loss basis and we were able to follow suit.

 

As a general rule though, certainly with our policies - clearly I can't speak for other providers - once all of the required information is in, the payout from the GAP insurance policy is normally made within a day or two (working days).

 

I hope this helps.

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  • 1 year later...

Reviving this to see if anyone can help...

 

Just wondering what route I should go down with regards to GAP - just picked up my brand new 2018 Octavia vRS so not sure what type would be best to cover this car... return to invoice or replacement?

 

I've tried researching the ins and outs but it's all a bit complicated so if someone can explain to me in simple terms what I should be looking at it would be much appreciated :blush

 

Also, how do I work out the value I will need covering? Again, sorry for playing 20 questions here!

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1 hour ago, siobhanemerald said:

Reviving this to see if anyone can help...

 

Just wondering what route I should go down with regards to GAP - just picked up my brand new 2018 Octavia vRS so not sure what type would be best to cover this car... return to invoice or replacement?

 

I've tried researching the ins and outs but it's all a bit complicated so if someone can explain to me in simple terms what I should be looking at it would be much appreciated :blush

 

Also, how do I work out the value I will need covering? Again, sorry for playing 20 questions here!

 

Hello Siobhan,

 

If you've purchased the vehicle (either cash outright or financed it), then whether you go for Invoice or Replacement GAP insurance comes down to a matter of personal preference and/or budget.  Replacement GAP insurance is technically the superior of the two policies but that also means it's therefore more expensive.

 

In a nutshell, the different policies work as follows in the event that your vehicle is written off through accident, fire, theft or flood:

 

Invoice GAP Insurance

Aims to pay the difference between your motor insurance payout and the greater of either:

  • The amount outstanding on finance at the time of claim, or
  • The original invoice price that you paid for your vehicle.

Replacement GAP insurance

Aims to pay the difference between your motor insurance payout and the greater of either:

  • The amount outstanding on finance at the time of claim, or
  • The original invoice price that you paid for your vehicle, or
  • What it would cost at the time of claim to replace your vehicle with a brand new version of the same (or nearest equivalent) vehicle.

 

In terms of working out what level (Claim Limit) to go for, that will depend on the duration of cover you require and the policy type.  If you happen to have financed the vehicle by way of a PCP agreement, a good start would be to take the invoice price you paid for it and deduct from that the sum of the final payment due at the end of the PCP term.  The resulting figure should ideally be the minimum claim limit you consider for an Invoice GAP insurance policy covering the same duration as the PCP term.  A Replacement GAP insurance policy *may* warrant a slightly higher claim limit but, not always.

 

You can find out more info on our website: www.gapinsurance.co.uk or if you wish, give us a call on 01484 490095.  We're more than happy to talk through all of your options with you and give you as much information as you require to make an informed decision as to whether to proceed with GAP insurance or not.  We're not a motor dealer, there's no sales tricks or obligation etc.  Just good, solid, advice - as others on this forum will testify.

 

Of course if you have any questions and prefer to ask them via this forum (either in public or via PM) then that's fine with us too.

 

I hope this helps.

 

David

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