Insurance can be complicated, but we are here to help you. If you come across terms you don't understand or want to check your understanding, use this guide for definitions.
GAP Insurance
GAP Insurance
GAP, or Guaranteed Asset Protection, is an optional insurance that helps you financially if your vehicle is stolen or written off (when an insurance company decides that a damaged vehicle is either unsafe to drive or too expensive to fix).
When your vehicle is written off, your motor insurer usually pays only what it's worth at that time (called The Market Value) which might be less than what you still owe
on finance or what you paid for it. GAP insurance helps cover the remaining finance and can assist you in getting a new vehicle.
Market Value
This is how much your vehicle is worth at the time your motor insurer decides it's not worth repairing after an accident or not found after being stolen.
The value depends on things like how old your vehicle is, it's condition, how many miles it has and what people are willing to pay for similar vehicles in the market.
Purchase Price
If you have a GAP policy called Return to Invoice, it will pay the difference between what your motor insurance pays and what you originally paid for your vehicle if it is a total loss.
The Purchase Price is the amount you actually paid for the vehicle. When buying a vehicle, extra costs like Road Fund Licence, Fuel, Warranty, and Paint Protection can be added to the total amount,
but these are not covered by your GAP policy and will not be included in the Purchase Price when it comes to the amount you receive from your GAP claim. It’s important to check your GAP policy to see what items are not included in the Purchase Price of your vehicle.
Total Loss (write off)
This means your motor insurer has decided that your vehicle is too badly damaged to repair
Temporary Replacement Vehicle (Hire vehicle)
If your vehicle is written off and you make a claim under your GAP policy you may have the option to being given a hire car, which can really help temporarily if you are without a vehicle.
Excess
Excess is the amount you pay when making a claim. Your motor insurance usually has an excess. If your vehicle is a total loss and you've paid an excess to your motor insurer, your GAP policy will contribute towards this as part of your GAP claim. The good news, there is no excess to pay for a GAP insurance claim.
Motor insurer Settlement / Motor Insurer Offer
This is the amount your motor insurer agrees to pay.
Premium
This is the price for your insurance.
Claim Limit
This is the maximum amount of money your GAP insurance policy will pay after a successful claim.
Deposit rental
This is the first payment (essentially a deposit) that the customer pays under a contract hire/lease agreement. This is often higher than the fixed monthly vehicle repayments that you then pay each month for the vehicle.
