GAP insurance: what it doesn’t cover

Even with comprehensive car insurance, after a total loss, your motor insurance company will only pay you a settlement up to the market value of the car at the time of the accident. Guaranteed Asset Protection (GAP) insurance tops up your car insurance settlement to help cover the cost of replacing your vehicle after a write-off or theft.

Typically, GAP insurance covers the difference between the vehicle’s original value (the invoice price) and the market value settlement figure from your car insurance.

While total loss GAP insurance helps protect you from a financial shortfall, there are some exclusions and restrictions to be aware of before purchasing a GAP policy. Understand the limitations, what GAP insurance won’t cover and how to use this information when choosing the best type of GAP insurance policy.

GAP Insurance Exclusions – Vehicles

• GAP insurance doesn’t cover vehicles without a fully comprehensive car insurance policy in place.
• Some of our policies include age and mileage limits. Contract Hire GAP insurance and Back to Invoice GAP insurance cover cars up to 10 years old. Vehicle Replacement GAP insurance covers vehicles less than 7 years old.
• We can’t cover vehicles worth over £125,000. Agreed Value GAP insurance covers vehicles up to £75,000.
• We only cover vehicles listed in Glass’s Guide.
• We can’t cover Ferraris, Lamborghinis, Maseratis and Rolls Royces.
• Any left-hand drive vehicle, American import or Grey import isn’t eligible.
• ALA GAP insurance doesn’t cover vehicles used for hire and reward purposes such private or public rentals, taxis, driving tuition vehicles, courier or delivery vehicles.
• Rally, competition or off-road vehicles of any type are also excluded.
• GAP insurance doesn’t cover any vehicle modified out of line with the manufacturer’s original specifications.

What Losses Aren’t Covered by GAP Insurance?

In specific scenarios, GAP insurance covers your outstanding finance. However, it doesn’t cover negative equity transferred from another finance provider or previous arrangement.

We include excess cover up to £250 on all policies, but you will have to cover any additional car insurance excess or purchase optional Excess Insurance to cover larger amounts.

GAP insurance differs to a service plan and car warranty – it never covers vehicle repairs.

Are There Limits to GAP Insurance Coverage?

Like all insurance policies, GAP insurance comes with certain restrictions which are as follows:

• The GAP insurance claim limit is capped at £50,000 or 110% of the vehicle’s value (BTI & VR). You can select a lower GAP coverage limit in our quote calculator but this will affect your maximum possible claim amount. Read about how much your GAP insurance can payout
• We can only pay out if your comprehensive car insurance pays out. However, we have a 99% payout rate. Read the causes of an unsuccessful claim.
• We can’t pay your GAP insurance claim if you declined an offer by your motor insurance company to repair the vehicle
• If you receive a replacement vehicle from your car insurance after a total loss, you cannot reject the replacement car and claim on your GAP insurance with us.
• GAP insurance is only valid for a single claim. Once you make a successful claim, your policy term will end and you will need a new contract for the replacement vehicle.
• GAP insurance policy lengths are finite, meaning you can’t extend your cover or take out a second policy (unless you’re still eligible) after your initial contract expires. Therefore, choose the maximum GAP policy length you think you’ll need or you won’t get the full benefit.

Buy GAP insurance to cover the finance gap

Who Isn’t Covered by GAP Insurance?

• Only permanent residents of the UK, Isle of Man or the Channel Islands are eligible
• You must also have a valid full or provisional UK driving licence
• You must be the policyholder or a named driver on the comprehensive motor insurance policy for the insured vehicle. Amend who your GAP insurance policy covers in your My ALA account.
• GAP insurance doesn’t include any compensation for fatalities, injuries or third-party damages

Choosing the Right GAP Insurance Policy for You

There are several different types of GAP insurance available. The right one for you will depend on several factors, including the age, mileage and value of your vehicle, as well as how you paid for it. Read your policy document for terms and conditions.

Back to Invoice GAP insurance

Back to Invoice GAP insurance (also called return to invoice GAP insurance) pays the difference between your motor insurer’s market value figure and the original invoice price of your vehicle or your outstanding finance payments (whichever is higher at the time of the claim).

You’ll have 180 days to take out a policy unless you have a new-for-old replacement on your comprehensive insurance policy. BTI covers cars less than 10 years old., and is only available for dealer-bought cars.

Vehicle Replacement GAP insurance

Vehicle Replacement 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 total loss, or your outstanding finance, whichever is higher.

You’ll have 90 days to take out a policy. VR covers cars less than £125,000 and 7 years old, with less than 80,000 miles on the clock. This is only available for dealer-bought cars.

Contract Hire GAP insurance

A Contract Hire GAP insurance policy will settle up to 100% of any outstanding rental payments on a contract hire vehicle, as well as up to £3,000 of your initial rental and any gap in the market value of the vehicle given by the motor insurance.

You’ll have up to 365 days to take out a policy.

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.

You have as long as you want to take out a policy. AGV covers vehicles bought from car dealers or private sellers, worth up to £75,000.

GAP Cover with ALA Insurance

GAP insurance helps ensure car owners can afford a replacement car if the worst happens and the vehicle is written-off or stolen. ALA offers exclusive benefits such as excess cover as standard, free transfers, zero admin fees and a 120-day limit for making a claim. The industry standard is 30 days.

We have a 99% payout rate and over 19,000 five-star reviews on Trustpilot.

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 Tyre and Alloy wheel insurance, Scratch & Dent Insurance and Keycare.