If your vehicle is completely written off, most motor insurers will only pay out for the current value of the vehicle. A car is one of the biggest investments most people will make, so they need to be protected against any eventuality. Guaranteed asset protection (GAP) insurance will ensure that you receive the difference between the amount you originally paid for your vehicle and how much your motor insurer has valued your vehicle at. This is the perfect choice for anyone who has bought a brand-new car outright, or has opted for a finance or leasing deal.
In this guide, we will explain GAP insurance coverage in full, from what it does and doesn’t cover, to whom and where coverage applies.
What does GAP insurance cover?
As vehicles depreciate at an alarming rate, GAP insurance can leave motorists safe in the knowledge that, if their vehicle is written off, they will be able to claim back the original buying price of the vehicle. To be eligible, the insured vehicle must be a private car, passenger vehicle or light commercial vehicle that is registered in the United Kingdom and does not exceed 3.5 tonnes in weight. As well as protection from total loss in the event of damage or theft, GAP insurance will also cover for any unforeseen events in which your vehicle is deemed as a total loss.
GAP insurance quotes include a range of features, including the vehicle invoice price, level of cover, term of cover, excess contributions and additional cover, the latter of which you can opt in for. In order to find the perfect policy for you, how you purchased your vehicle can affect which variation you should go for. There are four insurance policies to consider: back to invoice plus, agreed value, vehicle replacement plus and contract hire plus. You can discuss which policy will suit you best by contacting a member of our team here.
What doesn’t GAP insurance cover?
There are, however, some instances where you or your vehicle will not be eligible for GAP insurance. You will need to make yourself aware of these restrictions and exclusions before you opt for a GAP insurance policy so that you don’t encounter any unforeseen surprises. These exclusions include, but are not limited to:
Any vehicle not covered by comprehensive motor insurance
Any vehicle not listed in the Glass Guide
Luxury cars, such as Maserati and Lamborghini
Grey or American imports (for example, left-hand drives)
Hire and reward vehicles and taxis
There are also restrictions in place when looking for a GAP insurance policy, including:
You must be a permanent resident of the United Kingdom, Isle of Man or the Channel Island, and you must have a valid full or provisional UK driving license
Your GAP insurance claim will not be successful if your motor insurer has denied your claim
ALA policies will not pay out if the total loss of the vehicle was caused by a crime that you were involved in
It is important to remember that the GAP policy won’t contribute more than £250 towards the motor insurance excess, but if you do have a higher excess, this wouldn’t invalidate a policy or stop someone from buying one. If your motor insurer has provided you with a ‘new for old’ replacement service on a vehicle that is less than 12 months old, it could still be worth having a GAP insurance policy running alongside this. Your insurer could revert back to only paying market value if the vehicle is stolen, for instance.
You can read more about what GAP insurance doesn’t cover in our full guide here.
Who does GAP insurance cover?
Most people in the UK with a full or provisional license are eligible to claim from a GAP insurance policy. However, you must also be the registered owner and/or keeper of the vehicle you are wishing to insure. As previously mentioned, you also need to be a permanent resident of the UK, Isle of Man or Channel Islands.
You must also have fully comprehensive motor insurance. Anyone driving your vehicle will also be protected by your GAP insurance policy as long as they are a named driver on your comprehensive policy. Policies with ALA will automatically protect all named drivers on your comprehensive insurance policy, but this excludes motor trade insurance policies.
It is important to remember that GAP insurance will not cover anyone driving your insured vehicle that has their own motor insurance. Also, if you use your vehicle for activities such as rally driving and road racing, you won’t qualify for GAP insurance.
If you believe that you qualify for GAP insurance, you can receive a quote on our website here. You can read our full guide on who GAP insurance covers here .
Where does GAP insurance cover?
As mentioned previously, you must be a permanent resident in the United Kingdom, Isle of Man and the Channel Islands. If your comprehensive motor insurance extends to cover countries of the European Economic Area (EEA), then you will be covered should anything happen in these countries.
There are locations where your GAP insurance policy will not extend to, so it is important to check with an expert before you settle on a policy. Countries in North and South America, Asia and Africa will be excluded from your GAP insurance policy. Any EEA countries that your comprehensive insurance doesn’t extend to also won’t be covered.