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What is Agreed Value Gap Insurance?


Agreed Value Gap is another form of Guaranteed Asset Protection but quite different from the traditional Gap Insurance types like Return to Invoice or Vehicle Replacement Gap. With Return to Invoice or Vehicle Replacement Gap, you need to provide an invoice from a VAT registered motor dealer to make a successful claim.

With Agreed Value Gap, no invoice is necessary. Instead, the value you are covered to is worked our another way. This is done by referring to the retail value confirmed by Glass's Guide on the day you buy the policy.

Agreed Value Gap is available for vehicles bought within the last 30 days privately or from an auction. It is also available for people who have a Gap policy that is currently running out, and they want further cover for between 2 and 4 years.


Here is an example of how Agreed Value Gap Insurance can work


Let's say you buy a car privately within the last 30 days. You may have paid, say, £10,000 for the vehicle, but the policy will use the Glass's Guide retail valuation as the amount it will cover you back to.


The guide price was £11,000 when you bought the policy. You buy a three-year Agreed Value Gap Insurance on this basis.


Let us assume it is now two years later, and the vehicle is stolen and declared a total loss by your motor insurer.


The vehicle could then have a value of £7,000.


Your Agreed Value Gap policy will pay a shortfall of £4,000 to the motor insurers settlement to get you back to the original £11,000 value given by Glass's Guide on the day you bought the policy.


The Agreed Value Gap had covered the shortfall between the Glass' Guide retail valuation when you bought the policy and the market value settlement paid to you by your motor insurer when they declare the vehicle a total loss.


Who may buy an Agreed Value Gap Insurance policy?


There are several circumstances where you may consider buying an Agreed Value Gap Insurance, including:


  • You buy a motor car from a private individual or an auction, and you want to protect the retail value from the time you buy it.


  • You have an existing Gap policy that is running out. If you want to keep the car for an extended period, Agreed Value can protect the current value for several further years.


When is Agreed Value Gap Insurance not needed?


Again, there may be many circumstances where the Agreed Value Gap cover may not be suitable. These may include:


  • Where you buy a car from a VAT-registered motor dealer, in this circumstance, you should find that a Return to Invoice Gap or Vehicle Replacement Gap policy can offer you a better option.


  • You have a vehicle on a lease agreement with no option to buy. If you do not own the car, you cannot protect the purchase price or current value. Vehicles on this type of lease require a Contract hire/Lease Gap Insurance instead.


  • If you are running down a current Gap policy and you only intend to keep the vehicle for a short period after. In this situation, protecting the current value may not be the best option as the car may only lose a small amount in value over a short period. You may look for a form of Top Up Gap Insurance which pays a percentage over the motor insurers settlement instead.


Typical exclusions for Agreed Value Gap Insurance cover


We do stress that the Agreed Value Gap can differ when different companies provide it. Here we can tell you what you may expect to see excluded usually, but please carefully check any Agreed Value policy.


Typical exclusions you may find could include:


  • Vehicles over a certain age and mileage - with our policy, your car must have less than 80,000 miles on the clock AND be less than eight years old on the day you buy the Agreed Gap policy.


  • Cars used for taxi, driving school or courier/delivery purposes usually are not covered.


  • We also do not cover motorbikes, scooters, motorhomes or commercial vehicles for Agreed Value Gap Insurance.


  • Agreed Value Gap Insurance cannot cover vehicles that a motor insurer has already written off. This may include cars that have had Gap Insurance claims on them already, been repaired and sold at an auction. This could also include where a vehicle has been damaged recently and where the intention is to buy an Agreed Value Gap to claim it for that loss.


  • Where the vehicle is not already fully comprehensively insured. Agreed Gap Insurance is not a substitute for fully comprehensive motor insurance, so you could not, for example, cancel your motor insurance and take out an Agreed Value Gap policy to cover if the vehicle is then written off.


  • Any claim on an Agreed Value Gap Insurance cover can only be processed if the primary insurer has written the vehicle off and paid out the market value as settlement. If the main motor insurer does not pay out then you cannot claim on your Agreed Value policy.



Does Agreed Value Gap Insurance cover me if I have finance on the vehicle?

Yes and no. If you have a lease with no option to own the vehicle, this policy is not for you. You must own the car to qualify for cover.


If you have a finance agreement on your car and you take out an Agreed Value Gap cover, then the policy is not directly impacted by the fact you have finance, nor does it provide linked protection. However, in covering the current market value with an Agreed Gap policy, this means if the vehicle is written off in the event of a total loss, your 'agreed value' can help you cover the financial settlement you may have.


If you have any further questions on the Agreed Value Gap, don't hesitate to contact us. If you would like a quote, then go to the Gap Insurance quote page.


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