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3 reasons your GAP insurer can’t pay out | Common policy problems

16 November 2023

Written by Simon England

|  5 Minutes

GAP, or Guaranteed Asset Protection insurance, is an affordable type of insurance to help protect you from a significant financial shortfall after a total loss. A GAP payout usually tops up the market value settlement from your car insurer.

However, there are certain requirements you need to meet to be able to buy a GAP insurance policy or to make a successful claim . We outline the occasional scenarios where your claim could be unsuccessful and some typical challenges when taking out a GAP policy. ALA tries to determine the most favourable outcome for the customer; we explain a couple of instances where you can help us do this.

Four reasons your GAP insurer can’t pay your claim

There are very few reasons why GAP insurers can’t pay your claim. We outline some limitations to our services.

1. Your car insurance doesn’t pay out

This is the most important factor determining whether you get a GAP insurance payout. You may not get a car insurance payout after a total loss for several reasons. Not all insurers provide cover where an uninsured driver hits you or someone steals your car when left unattended and unlocked. No insurer will cover you if you get into an accident while under the influence of drugs or alcohol.

GAP insurance covers the shortfall from your car insurer’s market value settlement. We have no shortfall to cover if the car insurer doesn’t pay out.

2. You don’t provide the right documents

When making a claim, you must provide your vehicle purchase order, invoice documents, and a copy of your finance agreement (if applicable)—alternatively, your contract hire agreement. You will also need a copy of your comprehensive motor insurance certificate and GAP insurance policy document. Read more about the required documentation to understand what you need to make a successful claim.

3. You have new-for-old cover with your comprehensive motor insurance

Some car insurers replace your vehicle new-for-old within the first 12 months if it’s written off. This exists to help protect vehicle owners against fast depreciation within the first year of owning a new car. If you write off your vehicle and decline the new-for-old replacement from your insurer, you will not be able to make a GAP claim. Meanwhile, if you accept a new-for-old replacement from your insurer, there is nothing for us to cover. The advantage is that you can transfer your GAP insurance policy onto your new car at no additional cost.

Common problems with GAP insurance payouts

In unusual cases, your GAP payout may be less than you expected. We outline why this could happen on rare occasions.

If the settlement from your motor insurer is less than the market value of your car at the time of the total loss, then we can’t cover your entire shortfall. This can happen with an Agreed Value car insurance policy or if you accept a low settlement before consulting us first.

Ordinarily, GAP insurers top up your (market value) car insurance settlement. Your car insurer is legally obligated to offer a fair payout, so if this is lower than the market value, we will speak with your insurer until they present a fair settlement. In cases where we don’t have the opportunity to negotiate, we can only ‘top up’ from the vehicle’s market value. Moreover, if you have finance carried over from another car (negative equity), you will be responsible for the remaining balance.

A row of brand-new cars in a parking lot at a dealership

What challenges can occur when taking out a policy?

Certain exclusions apply to GAP insurance, and you will not be able to take out a policy if any of the following applies to you:

  • You don’t have comprehensive coverage
  • You use your vehicle for courier, taxi or delivery services
  • You use your car for other professional purposes, including tuition, competitions or rental.
  • Your vehicle is older than ten years
  • Your vehicle has a mileage over 100,000 (for an Agreed Value GAP insurance policy )
  • Your vehicle is not in the Glass’s Guide

Read our advice page on GAP insurance requirements

What are the benefits of ALA GAP insurance

GAP insurance tops up your comprehensive car insurance settlement, so in most cases where your motor insurance company pays out, we will too. In fact, we have a high payout rate of 99%. We outline some additional benefits to ALA’s GAP insurance policies:

  • We liaise with your motor insurer on your behalf to get you the most favourable settlement.
  • If you already have new-for-old cover on your car insurance plan, we give you up to 12 months to take out a Back to Invoice GAP insurance policy with us.
  • We cover cars bought through private sellers with our Agreed Value GAP insurance policies. Agreed Value GAP is also available for vehicles that exceed the timeframe requirements of the other policies.
  • We cover up to £3,000 of your car leasing deposit if you choose a Contract Hire Plus policy.
  • We include excess cover up to £250 as standard for GAP insurance policies excluding Agreed Value GAP.
  • You can add other insurance products such as excess cover up to £1,000 or Keycare for an additional premium.

We are rated as the number one insurance company on Trustpilot for our excellent-value insurance and helpful customer service. If you have a question about your GAP insurance policy or expect an issue during the claims process, contact one of the team. We always help our customers reach a favourable resolution.

We are authorised and regulated by the Financial Conduct Authority , and the Financial Services Compensation Scheme protects all policies. We’re pleased to say that we receive very few complaints, but if we are unable to come to a resolution, contact the Financial Ombudsman Service .

Get your GAP insurance quote today and see how much you could save!

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