Any insurance policy has boundaries, and GAP is no different. Knowing where they sit before you buy is better than discovering them at claim stage, so here are the situations where a GAP policy will not respond.
There has to be a total loss
GAP sits on top of a motor insurance settlement. If your insurer repairs the vehicle rather than writing it off, there is no shortfall and nothing for GAP to pay.
It follows that if your motor insurer declines the claim altogether, GAP has nothing to attach to either. The underlying claim has to be accepted and settled first.
The vehicle has to be eligible
Policies set criteria at the point of sale, and a vehicle that does not meet them is not covered, however long the policy has been running.
For our policies that means being up to ten years old, with you as the registered keeper and the policyholder on the main motor insurance. There are usually limits on vehicle value too, and some vehicle types are excluded outright.
The use has to match
This is the one that catches people. A policy written for private use will not respond if the vehicle was being used for hire and reward, delivery work or any other commercial purpose not declared at the outset.
If your circumstances change mid-policy, tell your provider rather than assume the cover stretches.
There is a maximum claim limit
Every policy caps what it will pay. Where the shortfall exceeds that cap, the policy pays up to the limit and the rest remains yours.
On higher value vehicles, or long agreements with significant negative equity, this is worth checking carefully before you buy rather than afterwards.
Some costs are never covered
Arrears, missed payments, late fees and administration charges on a finance agreement are generally excluded, as are any negative equity balances carried over from a previous vehicle into the current agreement.
Undeclared modifications and anything misstated when the policy was taken out can also invalidate a claim.
If you accept a reduced settlement
If you settle with your motor insurer for less than a fair market value, perhaps to keep the salvage, the GAP calculation is normally based on what a fair settlement would have been rather than what you accepted. You would carry that difference yourself.
The sensible approach
Read the eligibility criteria and the maximum claim limit before you buy, and tell your provider when anything changes.
If you want to check whether your circumstances fit before committing, call us on 0161 388 2550 or email sales@gapinsurancetoday.co.uk.
