If you’re in the market for a car insurance policy, there are a number of things you will need to consider. Your motor insurer will cover damages to your vehicle in the event of an accident and injuries you cause to others and their property.
Guaranteed asset protection (GAP) insurance is designed to cover the difference between what your vehicle was worth when you bought it and the settlement figure your motor insurer would provide after you make a claim.
While GAP insurance could help protect you from a financial shortfall if your vehicle is written off, there are some exclusions and restrictions to cover you should be aware of before purchasing a policy.
In this guide, we’re going to discuss some of the things a GAP insurance policy won’t cover and how to use this information when choosing the best type of GAP insurance for you.
GAP insurance cover exclusions
After reading up on what is included in a GAP insurance policy, you should familiarise yourself with the policy exclusions. These include:
Any vehicle that is not covered by comprehensive motor insurance.
Any vehicle that has been modified in a fashion that is outside of the manufacturer’s specifications. This includes engine enhancements.
Vehicles over a certain age—vehicles over 10 years old are not eligible for our Back to Invoice Plus GAP insurance, for example. Vehicle age limits can differ from policy to policy.
Vehicles over a certain value—for our Vehicle Replacement Plus GAP insurance, for example, this figure is £150,000. Again, this limit can differ from policy to policy.
Vehicles over a certain mileage—for our Agreed Value GAP insurance, for example, the limit is 100,000 miles on the clock.
Any vehicle that is not listed in Glass’s Guide. Examples of vehicles that fall into this category include antique cars, modified cars and kit cars.
Ferraris, Lamborghinis, Maseratis, Rolls Royces and other luxury cars.
Any grey import—these are vehicles imported into EU Member States from non-EU countries that do not have European Community Whole Vehicle Type Approval (ECWVTA).
Any left-hand drive vehicle or American import.
Emergency vehicles, coaches, trucks, motorhomes and trailers, breakdown recovery vehicles, taxis and private hire/hire and reward vehicles, courier vehicles or off-road vehicles. However, some providers may offer this coverage as an add-on.
Road racing or rally cars, vehicles used for timed or untimed track days, pace-making or speed testing vehicles, and any other type of vehicle used for competitive purposes.
Additionally, GAP insurance will not cover you for vehicle delivery fees, service plans, extended warranties, first registration fees It also won’t cover negative equity transferred from a previous finance deal.
GAP insurance cover restrictions
Like all insurance policies, GAP insurance comes with restrictions:
You will only be eligible for cover if you are a permanent resident of the United Kingdom, Isle of Man or the Channel Islands. You must also have a valid full or provisional UK driving license and be the policyholder or individual named on the comprehensive motor insurance for the vehicle in question.
Our policies will not cover motor insurance excess exceeding £250.
Our policies will not provide cover if the claim or total loss of your vehicle is caused by you directly or indirectly taking part in a crime.
It also won’t provide cover for death, bodily injury or damage to any person or property as a result of the total loss of your vehicle. These damages are covered by your auto policy and are excluded from the GAP cover because of liability concerns.
Your GAP insurance cover will not pay out if your comprehensive motor insurance provider has declined your claim.
We will also not pay for a claim if your comprehensive motor insurer offers to repair your vehicle but you have chosen for this to be dealt with on a total loss basis instead.
The policy will not cover the cost of damages incurred if you have improperly filled your vehicle with the wrong fuel.
A GAP policy won’t cover damages to vehicle paint and upholstery, or any modifications unless the vehicle is specifically designed for a disabled driver.
Another restriction worth noting is the ‘new-for-old’ replacement service from motor insurers for new vehicles that are less than 12 months old. We would still recommend having a GAP policy running alongside this, as your insurance provider could revert to only paying the market value if the vehicle is stolen, for example.
If you have GAP insurance on this vehicle but are entitled to a replacement vehicle on your motor insurance policy, you can transfer the remaining cover on your GAP policy to your replacement vehicle.
Choosing the right GAP insurance policy for you
There are a number of different types of GAP insurance available. The right one for you will depend on several factors, including the age and value of your vehicle as well as how many miles it’s got on the clock.
Back to Invoice Plus GAP insurance
Back to Invoice Plus GAP insurance pays the difference between your motor insurer’s settlement figure and the original invoice price of your vehicle or your outstanding finance payments (whichever is higher at the time you make your claim).
Agreed Value GAP insurance
If your vehicle is a total loss, Agreed Value GAP insurance will reimburse you the difference between what your comprehensive insurance pays and the Glass’s Guide retail value of your vehicle when you purchased your policy.
Vehicle Replacement Plus GAP insurance
Vehicle Replacement Plus GAP insurance will cover the difference between your motor insurer’s payout figure and the replacement cost of an equivalent to the vehicle as it was originally priced, not at the time of the write-off, or your outstanding finance, whichever is higher.
Contract Hire Plus GAP insurance
A Contract Hire policy will settle up to 100% of any outstanding rental payments on a lease or contract hire vehicle, as well as any shortfall in your comprehensive motor insurer’s initial rental cover
GAP Insurance with ALA
GAP insurance from ALA is designed for car owners who want more robust protection for their vehicle in the case that their car gets written off. We offer exclusive benefits that other insurers don’t offer, such as free transfers with no admin fees and a 120-day limit for making a claim instead of the industry-standard 30 days.
Our policies are fully authorised and regulated by the Financial Conduct Authority and are underwritten by FSCS-protected companies. You can tailor your policy to your specific needs, including optional covers such as Keycare, Tyre/Alloy and Scratch & Dent Insurance.