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How much will my GAP insurance provider pay out?

If your car is declared a total loss and you have taken out a GAP (Guaranteed Asset Protection) insurance policy, how much you are set to receive depends on several factors. How much your car was worth at the time you took out your policy, the cost of a replacement vehicle, or how much you have left to pay on your finance agreement or leasing contract (depending on your GAP policy) all play a part in determining how much you will receive. If you have already taken out a GAP insurance policy, there are ways to find out how much you may receive if your car is written off or stolen.

In this guide, we will explain when your GAP insurer will or will not pay out, when you can expect your claim to be processed, and whether or not you are able to receive a refund on your policy. We will also highlight the benefits of a GAP insurance policy with ALA, and how you can protect your vehicle and your finances.

When will my GAP insurance cover pay out?

As long as your comprehensive car insurance provider pays out, it is almost guaranteed that your GAP insurance provider will too. You should make a claim as soon as possible after your vehicle has been declared a total loss, and you have 120 days from the date of the declaration to make your claim. Each GAP coverage policy will pay out a different amount based upon the difference between the car insurer’s settlement and:

  • The original invoice price of the vehicle or the finance settlement figure, whichever is higher on a Back to Invoice Plus (or Return to Invoice Plus) policy
  • The cost for a replacement vehicle, or the outstanding finance payments, whichever is higher at the time of claim on a Vehicle Replacement Plus policy
  • Up to 100% of the remaining rental payments for the vehicle on a Contract Hire Plus policy
  • The market value of your vehicle when you purchased your policy on an Agreed Value Plus policy

If you are looking for a GAP policy, but aren’t sure which policy you should take out, you can fill out our quote builder to find the best choice for you.

When won’t my GAP insurance provider pay out?

There aren’t many instances where GAP insurance won’t pay out. If, for any reason, your car insurance provider won’t reach a settlement, your GAP insurance provider won’t pay out. Your GAP insurance company may also refuse to pay out if you refuse the new-for-old vehicle replacement that your car insurance provider offers you.

When can I expect my GAP insurance claim to be processed?

In order to start making your claim, you need to ensure that you have the correct documentation. When making your claim, ALA may ask you for documents including:

  • Your vehicle purchase order, your invoice, or your finance agreement if applicable
  • A copy of your motor insurance certificate, including their statement and how they calculated their settlement
  • Your GAP insurance policy schedule
  • Any third-party details, if applicable

As soon as your car is declared a total loss, no matter whether it is written off or stolen, you should aim to submit your GAP insurance claim straight away. As previously mentioned, your GAP insurer cannot act until your motor insurer has agreed to pay out. Therefore, you should get in contact with us as soon as you are able so that we can efficiently process your claim.

Could I get a refund on my GAP insurance policy?

If you decide that you no longer want your GAP insurance policy, you may be entitled to a refund, but there are factors to be aware of. All of our policies here at ALA come with a 30-day cooling-off period, and if you cancel within this time period, you are entitled to a full refund, so long as no claims are being processed at the time. If you have any additional extras running concurrently with your GAP insurance policy, they can also be refunded if you wish to cancel them. For instance, excess and key insurance policies each have a 14-day cooling period, and we will refund you in full within this time frame.

Outside of this 30-day window, you are still able to cancel your policy at any time. Your refund will be in proportion to the number of unexpired days on the policy. A £35 administration fee will be deducted from this amount.

However, cancelling your GAP insurance policy could leave you out of pocket should the worst happen to your car, especially if the vehicle is brand new or high in value. To find out more about the benefits of GAP insurance, you can visit our advice centre.

GAP insurance policies with ALA

Here at ALA, we will always be transparent with you concerning your GAP insurance policy, from your policy terms to your claim limit. If you have any questions concerning your policy that cannot be answered on our Frequently Asked Questions page, you can get in touch to speak to a member of our team.

You can fill out our online form here, or you can give us a call.

19 July 2023

Written by Simon England

|  5 Minutes

This article was written by our Founder & Managing Director.

Simon England

Simon has worked in the automotive and insurance industries for 40 years. He, alongside business partner and wife, Debra...