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What is a GAP Insurance Claim Limit and how could It affect any claim you make?

 

The claim limit is the maximum that your GAP Insurance policy will ever pay.

This is the most your GAP insurance will pay to top up your own motor insurance settlement.

 

 

Every insurance policy will have a maximum amount, however. House insurance, life insurance and GAP insurance are included. This is so that everyone, the policyholder and the insurance policy underwriter, knows exactly what the maximum amount is and can, therefore, set rates and prices accordingly.

 

Some GAP insurance suppliers, including some of our sister brands, encourage policyholders to select a claim limit. The tricky and difficult aspect is that no one will ever know for sure exactly how much you will need, as no one can know with absolute authority exactly how much your vehicle will be worth at a set time in the future.

 

For example, if you buy a car for £25,000 and have a GAP Insurance claim limit, on a Return to Invoice GAP, of £10,000, then this means the most the GAP cover can pay is £10,000 on top of your motor insurance payout, to get back to the invoice price of £25,000. If the motor insurer pays out £17,000 after the vehicle is written off, then the GAP cover can add another £8,000 (within the £10,000 maximum limit) to get back to the £25,000 fort paid. If the motor insurer only pays out £12,000, then the GAP payout would be capped at £10,000, and you would only get £22,000 back in total. 

 

Understanding your claim limit is important to ensure you are covered correctly. 

 

Motor and insurance experts study markets and predict what vehicles will be worth, using a complex formula which includes anticipated market forces as well as historical valuations but it is not an exact science. This means that if the claim limit you choose is too high, you could be charged more than you really need for your policy. By contrast, if the claim limit you choose is too low then even after your insurance company's settlement there may be a shortfall.

 

At Total Loss, we want our policies to be as innovative and forward-thinking as possible. Our aim quite simply is to ensure that customers are covered come what may and take a lot of the grey areas and guesswork away.

 

This means that our standard Return to Invoice and Vehicle Replacement Total Loss GAP Insurance policies do not have a claim limit for vehicle purchases up to £75,000. For vehicles purchased between £75,000 and £100,000, the maximum claim limit is £75,000. 

 

Our standard Lease & Contract Hire GAP products offer unlimited claim limits for vehicle rentals up to £750 a month, with a maximum cap of £25,000 for rentals between £751 and £1,000 a month. 

 

Total Loss GAP also provides some GAP products from different insurers, and some may have a maximum claim limit of £50,000. 

 

Please check the claim limit of the policy you are looking to purchase. The claim limit will be shown on the quotation and the policy paperwork. 

 

We hope that this answers your question but if you need any more help please just let us know.

 

Find out more and how our prices can save you money, click here