If you have new for old cover through your comprehensive insurer some GAP providers offer you the ability to defer your GAP policy.
However, it is worth bearing in mind the restrictions within your comprehensive policy which mean that your insurer, instead of replacing your car new for old, reverts back to giving you the market value for your car at the time of the total loss.
They can do this for a few reasons.
First of all, when you take out your motor insurance policy you provide the insurer with an estimate of the number of miles that you believe you will do in that year. If your car is subsequently written off then, from the mileage you have already done, if it looks as though you will exceed the mileage you estimated the motor insurer can revert back to market value.
For example, if you have stated 10,000 miles as your annual mileage and after 4 months your car is written off and has already done 6,000 miles then the assumption is made that you would continue to do an equivalent amount of mileage for the remainder of the year. This means that you would be over the original 10,000 miles and so in breach of the policy conditions. Your insurer can then use this to only pay you market value.
If this happens but on the basis you would receive new for old from your comprehensive insurer you have purchased a deferred GAP policy then obviously your policy won’t pay out.
This can also apply where the vehicle has pre-existing damage – damage that wasn’t a result of the incident that caused the write-off.
Other GAP provider’s may not bring this to your attention but this is the reason why here at ALA we don’t offer deferred GAP policies. We recommend that you purchase your GAP policy and have it running alongside your comprehensive insurance from the beginning.
If you have a GAP policy with ALA and your car is written off within the new for old timeframe and is replaced by your insurer then ALA guarantee to start you a new policy free of charge on the replacement car.
If your insurer, for whatever reason, only settles at market value then your ALA GAP policy will cover the shortfall, within the constraints of the claim limit.
If you have any more questions about Gap Insurance policies click here for our FAQs or click here if you would like a Gap Insurance Quote.
Click here to read more: News ALA Connect.