Car accidents are more frequent than we like to imagine, and it can often be difficult to determine who is to blame. In most circumstances when the accident is your fault, your car insurance will pay for repairs on your vehicle and those of the other party. If you are not at fault, the other party’s insurance will pay. GAP insurance is a great asset to have if the worst should happen to your vehicle, but if your car insurance provider won’t pay out, your GAP insurance policy won’t either.
In this guide, we will explain whether GAP (Guaranteed Asset Protection) insurance will pay out if you are at fault for an accident, when your GAP insurer won’t pay out, and how many claims you can make on one policy. We will also highlight when you can make a GAP insurance claim, and why choosing ALA for your policy is the best choice for you.
GAP insurance is a great way for owners of new or used cars to protect their investment and finances. GAP coverage can bridge the gap between what your comprehensive car insurer pays out if your car is written off or stolen and what you originally paid for the vehicle. GAP insurance can be provided for cars that have been bought from a car dealership or privately, and for vehicles on finance or leasing agreements.
At ALA, we have four GAP insurance policies available:
· Back to Invoice GAP Insurance (or Return to Invoice GAP Insurance) – covers the difference between the market value settlement and either a) the original actual cash value price, or b) the outstanding car finance, whichever is higher at the time.
· Vehicle Replacement GAP Insurance – will either pay the difference between the comprehensive car insurance settlement and a) the cost of a new car (with a similar make, model and age as when you originally purchased it), or b) the outstanding finance, if this is higher than the replacement cost.
· Contract Hire GAP Insurance – pays the difference between the comprehensive car insurance payout and the amount of outstanding rentals owed on your contract hire agreement. This policy will also cover any shortfall in the vehicle value in the event of a total loss claim.
· Agreed Value GAP Insurance – this policy has no mileage restriction, but is reserved for cars up to 20 years old (15 for vans).
The type of GAP insurance you need can depend on your cars age and mileage.
You can find out more about which policy is best for you on our website.
As long as your comprehensive car insurer pays out, your GAP insurance should pay out as well, unless you have breached any rules and regulations that you should have followed, such as using your vehicle for hire and reward. So, no matter whether you are at fault for your accident or not, GAP insurance will usually still pay out, as long as your car insurance cover does too.
However, your GAP policy won’t pay out if you left your car unlocked, unsecured and unattended, and your car was stolen as a result. If you would like to discuss the instances in which your GAP insurance provider won’t pay out, .
There aren’t too many scenarios where your GAP insurer won’t pay out, so long as your motor insurer does too. Your GAP insurance company may not pay out for several reasons, such as if an unnamed driver was driving your vehicle at the time of the accident, or you made your claim too late. These are also reasons why a car insurance provider won’t pay out.
Your GAP insurance provider will also refuse to pay out if you write off your brand-new insured vehicle, and you refuse the new-for-old replacement vehicle that your car insurer offers you.
If you need to make a claim on your GAP insurance policy, you will need to take out a new one on a new vehicle. GAP insurance is not like car insurance; it is not a legal requirement, but it can be extremely helpful in ensuring you are not out of pocket However, like car insurance, you will need a new policy if your car is written off or stolen.
GAP insurance policies do, however, come with claim limits, like car insurance policies. Claim limits on GAP insurance policies are usually suggested based on how the car is predicted to depreciate over a certain number of years. This will ensure that you are protected even at the end of your policy when your car is likely to have depreciated the most. However, in most cases, claim limits revert back to the full market value of your vehicle, so there should be more than enough cover, and you won’t have to estimate how much cover you may need.
To find out more about claim limits, please read our previous post here.
As soon as your car insurance provider has deemed your vehicle a total loss, you can then make a claim on your GAP insurance coverage policy. You should provide all necessary proof, including confirmation from your car insurance of the total loss of your vehicle. You have 120 days from the date of the total loss to make a claim. Your payment may be delayed or reduced, unless you request an extension giving a reasonable explanation for the delay.
Alongside your claim, you should attach a copy of any finance agreement (if your car was taken out on a finance agreement), a statement from your motor insurer highlighting the basis of the calculations, and evidence of payment from the insurance coverage settlement.
To find out more about making a GAP insurance claim, you can visit us on our website here
Here at ALA, we have years of experience in settling GAP insurance claims, helping thousands of drivers claim back the difference between their car insurer’s settlement and the original price they paid for their vehicle. Our expert customer support team can provide excellent advice and important information on how to best proceed with your claim, ensuring you receive exactly what you are entitled to.
To find out more, or to discuss your claim, you can get in touch with a member of the team today.
The length of a GAP insurance claim can vary depending on how quickly your motor insurer settles your main car insurance claim, as GAP cover pays out after this has been finalised.
You should contact your motor insurance provider first, not your GAP insurer. Once your main insurer confirms the total loss settlement, you can then contact your GAP provider to begin the GAP claim.
You can only make one claim on your GAP insurance policy, then you must purchase another policy to cover your new car. All restrictions and considerations can be found in your policy terms.
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