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GAP insurance policies: can they be renewed?

Part of responsible vehicle ownership is having an up-to-date car insurance policy. This can cover you with financial support in the event that you are in an accident, or your car is vandalised, stolen or damaged. However, one problem for many new car owners is that their insurance policy will not pay out for the full amount paid for the car in the event it is declared a total loss by their car insurance company.

GAP insurance is designed to cover the difference between what your comprehensive insurer would pay out and the amount you originally paid for the car (or your remaining finance payments) if the worst were to happen.

If you are considering some GAP coverage for your vehicle, you may be wondering how your policy would work, and particularly how long your coverage will last. In this guide, we’ll discuss how GAP insurance works to explain whether your policy can be renewed or extended after the policy term has ended.

Can you renew a GAP insurance policy?

If you have any experience with car ownership, you will know that your insurance policy has to be renewed or replaced at the end of every term. This is because it is a legal requirement to have insurance if you are using your car. Many policies auto-renew at the term end for convenience, though there are often opportunities to save money by switching to a new policy after your current one has expired.

GAP insurance policies are not the same as motor insurance policies. When you take out a GAP policy, it is for a fixed term—typically two to four years. When you reach the end of this period, the policy will not auto-renew and there usually is not an option to extend the policy or take out a new one. As such, a GAP insurer will not typically issue a renewal notice.

The main reason GAP insurance cover does not renew is that it generally doesn’t need to. If you bought your car through finance, you might have paid it off within five years. In this case, a GAP insurance policy with a two to four-year term will cover you until you no longer need that protection from a financial shortfall. GAP insurance will not be needed throughout the whole lifecycle of your car, so your cover will simply expire once the policy period is over.

Policy renewal alternatives

Though policy renewal is not something we offer with our GAP insurance, there are some things to consider. If you have GAP coverage with ALA and you change your car before your policy expires, we can provide you with a pro rata rebate of the original premium. You can use this rebate in one of two ways:

  • You can use the full amount as credit against a new policy to cover your new car. There will likely still be a balance to pay, but you will not be charged any admin fees.

  • The rebate amount can be paid to the policyholder, minus a cancellation fee of £35.

As previously noted, once you reach the end of a GAP insurance policy it is unlikely that you will need a new one. But if you switch to a new car before that policy ends, the option to transfer the remaining balance of the term over to your new vehicle can be very useful.

How much could you be short


Only £8,550

GAP insurance with ALA

ALA are one of the leading independent providers of GAP insurance in the UK. We base our service on openness and honesty, offering outstanding customer service and supporting every customer in making the right decisions for their needs.

We offer a number of different types of GAP insurance, including Back to Invoice Plus and Vehicle Replacement Plus. All of our products are competitively priced and fully compliant with industry regulations. We offer a range of benefits for our customers, including free policy transfers, a 120-day limit for making a claim (instead of the industry-standard 30 days), FSCS-protected underwriters and much more.

Frequently asked questions

When will my GAP insurance policy start, and when will it finish?

Your period of cover will begin on the date specified in your policy schedule. Your policy schedule will also include the date your cover will finish. We can offer support and guidance in assessing the ideal policy term for your needs.

How do I decide which type of GAP insurance to get?

There is a lot to think about when making this decision, and choosing the right type of GAP insurance can be quite confusing. This is why ALA go above and beyond in supporting our customers in making the right decisions for their needs.

The key things to bear in mind when looking into different types of GAP insurance are the age of your vehicle, the means used to purchase it (how, where and when) and the level of cover you require. For example, if you drive a lease or contract hire vehicle, consider Contract Hire Plus coverage.

Do you need GAP insurance if you have full coverage?

Even if you have comprehensive car insurance, GAP insurance can be useful. This is because car insurance often does not match the original vehicle invoice price or amount owed on finance, due to value depreciation. If you would need support in paying off your finance agreement should your vehicle be declared a total loss, or you simply want to avoid being out of pocket after an accident or theft, GAP insurance is a great thing to have in addition to your comprehensive car insurance.

However, you should bear in mind that you cannot get GAP insurance without comprehensive insurance. This is because GAP insurance cannot pay out for if your claim is refused by your motor insurer. Additionally, you may not need GAP insurance for a new car if your motor insurance will provide you with a replacement if yours is written off or stolen within the first 12 months of ownership.