GAP insurance is bought for a specific vehicle, not for a person. That catches people out when circumstances change part way through a policy, and since most GAP policies run for two, three or four years, plenty of things can change in that time.
Here is what normally happens in each scenario, and what to check on your own documents.
If you sell or part-exchange the car
Cover does not follow you automatically. Once the vehicle leaves your ownership there is nothing for the policy to protect, so it will not simply carry across to whatever you buy next.
You generally have two options: cancel and take whatever refund you are entitled to, or ask whether the policy can be transferred to the replacement vehicle. Which is better usually depends on how much of the term is left.
If you want to transfer the cover
Some GAP policies allow a change of vehicle mid-term and some do not, so this is the point to check your policy wording rather than assume.
Where a transfer is possible, it is not a formality. The replacement vehicle has to meet the same eligibility criteria the original did, which for our policies means being up to ten years old, with you as the registered keeper and the policyholder on the main motor insurance. If the new vehicle is worth considerably more or less, the cover may need re-rating, and any difference in premium would be dealt with at that point.
Tell us before the change rather than afterwards. It is far easier to arrange in advance.
If you cancel
You have a statutory cooling-off period of at least 14 days from the start of the policy, during which you can cancel and receive a full refund provided no claim has been made.
After that, refunds are usually calculated on a pro rata basis for the unused portion of the term, and an administration fee may apply. Both points will be set out in your policy schedule, so it is worth reading that section before you commit to a decision either way.
If the car is written off
If a total loss claim is settled under the policy, the cover has done what it was bought for and the policy ends. There is no refund of premium in that situation, which is normal across the market.
Changes that do not affect cover
Moving house or switching motor insurer will not usually end a GAP policy, but you do need to keep comprehensive motor insurance in place throughout, since GAP pays alongside that settlement rather than instead of it.
If your circumstances are changing, call us on 0161 388 2550 or email sales@gapinsurancetoday.co.uk and we will tell you where you stand before you act.
