They say a problem is well defined and half solved. Perhaps, nothing can be said better than this on the importance of having Gap insurance for your car. You know what the Guaranteed Asset Protection is popularly known as the ‘Gap’ in UK. Gap insurance, in essence, can be best described as a planned insurance that supports you on acquiring a new car when your existing car’s book value becomes nil. This is technically possible as your car loses its value every year through depreciation and an appropriate adjustment for that on its book value. It also safeguards you against the stealing of your car.
How does gap insurance work in your favour?
In case of a stolen brand-new car, for instance, the car insurance company will not pay you the price at which you actually bought the car. This, in other words, construes that you will be in trouble in the event of such an awkward situation. Gap insurance will come to your rescue there.
- Gap insurance lets you cover the unpaid value of your car so that you can buy a new car in place of the stolen/written off car without burdening you further.
- You can pay off the outstanding on the car with it.
- You can get support on the replacement cost of your car.
- You can get the difference amount paid between the insurer’s settlement amount and your car’s book value through it.
Coming this far, it becomes imperative to know the types of insurance plan that will guide you for purchasing the correct Gap insurance befitting your unique need. Besides, operators here run their unique products. As a matter of fact, finding the best insurance befitting a situation seems a Herculean task. We, therefore, discuss the major five types of insurance doing rounds in the markets.
- Finance Gap insurance: It is considered as the basic product in the markets of UK. It helps you pay off the outstanding amount on your written off car.
- Return to invoice Gap insurance: It works like a top-up on the insurance claim value from the insurer of your car.
- Vehicle replacement Gap insurance: As the name suggests, it is a Gap insurance that pays you the difference money for purchasing a new car and the claim settlement money received from the insurer of your earlier car.
- Return to value Gap: This vehicle replacement Gap insurance is found helpful in cases where you bought a second-hand car or used your car for a long time.
- Lease Gap: Lease means letting out for money or money’s worth. You can lease a car instead of buying it directly. A lease Gap insurance pays the contractual amount of the lease. In addition, it also takes care of the fees, if any, for terminating the lease.
As you see, your need for the Gap insurance may differ based on your actual situation. On the flip side, it can be said that the Gap insurance works in a complex market condition in UK befitting your coveted interests.
