GAP insurance protects you if you write off your car and your car insurance policy doesn’t pay enough to settle any outstanding loans on it or the cost of replacing it.
GAP stands for Guaranteed Asset Protection. There are different types of GAP insurance cover available. They basically cover the difference in the amount your car insurance company pays out if the car is a total write-off compared with what you still owe on any loans or finance or the amount you have to pay to replace the car.
GAP insurance is becoming progressively more popular because of the large devaluation costs on cars and their diminishing resale values.
Return to Invoice GAP insurance (RTI Gap Insurance). You can buy RTI GAP insurance for cars less than seven years old. However it can only be obtained within three months of buying the car. It repays the difference between your car insurance claim settlement total and the amount you bought the car for, the invoice amount for the car.
Return to Value GAP insurance (RTC Gap). You can buy RTV Gap insurance for cars aged between three months and seven years only. It will pay the difference between the car insurance claim settlement and the value of your car at the time you took arranged the policy.
Finance GAP insurance. You can purchase Finance GAP insurance for cars bought on finance, using a finance deal such as hire purchase or lease purchase. It pays the difference between your car insurance claim settlement amount and the amount owing on your loan or finance agreement. This means the payout could be more than that from RTI GAP insurance. For extra comfort you can get combined RTI and Finance GAP cover so you would secure the largest amount of money applicable.
Replacement GAP insurance. You can buy replacement GAP insurance to cover the cost of replacing your car with exactly the same make/model or equivalent as you originally bought. This can only be bought for new or Ex Demo cars that are less than 3 months old and has to be purchased within 90 days of buying the car.
To learn more regarding car gap insurance visit www.moneyhighstreet.com