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How does motor insurance work with GAP Insurance?


Your motor insurance cover is key to how a GAP Insurance policy will perform. It is important you have your motor insurance set up correctly to ensure any GAP claim can be paid. motor insurance and gap insurance


There can be some confusion as to what is required with your motor insurance in order for your GAP Insurance to work.


Here we explain what you need to know and explore some of the myths too. 


1. You must have motor insurance in place for GAP Insurance to work? - CORRECT


You must be fully comprehensively insured (with most providers) for the full GAP Insurance term to get full benefit on a GAP claim. 


2. Your motor insurer must pay out in order for you to claim on a GAP policy? - CORRECT


Any GAP Insurance claim is reliant on your main motor insurer covering the incident in question, writing off the vehicle as a 'total loss' and paying out the market value of the vehicle. 


If the main motor insurer does not do this then you cannot claim on your GAP Insurance


For more information on GAP Insurance click to go to our Complete GAP Insurance Guide


3. If my motor insurer writes off the vehicle I can accept their offer before lodging a claim for GAP Insurance? - INCORRECT


It is really important that once your motor insurer informs you that they are writing off the vehicle, and make you an offer, that you lodge your claim for the GAP claim BEFORE accepting the motor insurers offer. 


Why is this?


It allows the GAP claim team to assess the motor insurers' offer, and ensure it is a fair one. It also allows the GAP claims team to speak to the motor insurer on your behalf, and negotiate if necessary. 


The GAP claims team may also require some information and/or paperwork from your motor insurer, in order to process the GAP claim. 


By accepting the motor insurers offer before lodging the GAP Insurance claim can slow down the whole process. 


We would strongly advise that you simply tell your motor insurer that you have a GAP policy (many motor insurers ask anyway) and that you need to speak to the GAP claims team first. 


4. If you lend your vehicle to a friend and they drive on their own insurance, they are covered with the GAP policy too? - INCORRECT


Anyone who is driving the vehicle covered by your GAP policy must be fully comprehensively insured, named on your motor insurance policy and adhere to the t's and c's of the GAP Insurance cover. 


The issue with lending the vehicle to someone and them driving on their own insurance is that often they are only third party covered. Therefore if they write off the vehicle you will not receive a market value settlement from your motor insurer. 


No settlement from the motor insurer means no claim paid on the GAP policy. 


If in doubt, ensure anyone driving your vehicle is at least a named driver on the main motor insurance, fully comprehensively insured and they adhere to the GAP Insurance t's and c's.


5. I have a new car, and my motor insurer provides replacement cover in year one. I don't need GAP Insurance as well. MAYBE


We often hear from callers or see on the internet, variances of the statement above. You buy a new car and your motor insurer will basically replace it with another new one if the vehicle is written off in the first year you own it. 


As such, the advice often seen online is that you don't need GAP Insurance in that case. 


That is not necessarily the case. There are several aspects to consider if this matches your situation. 


  • Your motor insurance has terms to meet to get a replacement vehicle. These could include mileage stipulations, that you are the owner (it is not leased, or a 'pre-reg') and any repair cost must reach a stipulated percentage of the vehicle value. 

  • One other can be that the insurer must be able to locate a suitable replacement vehicle within a set timeframe. If these terms are not met you may not get a replacement vehicle at all. 

  • You may change motor insurer 'mid-year' and your new motor insurer does not provide new for old cover for the remainder. 


Those who ignore GAP Insurance because they think (mistakenly) that they can buy GAP Insurance once their first year new-for-old cover expires. 


The issue with doing this is that GAP Insurance must be purchased generally within 180 days of buying the vehicle. If you leave it until your year is up then you are out of time with most providers. 


When you see 'advice' telling you that you do not need GAP Insurance because of your 'new-for-old' cover, they forget that you may want to own the vehicle for 3,4 or 5 years. It is not just about the first year. 


One option available with some providers (including Total Loss Gap currently) is that you can buy GAP cover within 365 days of the vehicle purchase. This is only if the vehicle was brand new and you had new-for-old in that first year. You can also buy the GAP Insurance within 180 days and 'defer' that start date to start after your first year has finished. 


If you are concerned that your new-for-old cover may not give you a replacement vehicle then you can take GAP Insurance out anyway. By having it running in the background then you have a 'fall-back' position if the main motor insurer has to revert to a market value settlement. If the motor insurer does provide a new replacement then you can normally just switch the GAP on to the new car free of charge. 


Got any more questions about how GAP Insurance works with your motor insurance? If so then please just let us know. 

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