What is GAP insurance?
Here at Fleetcover we provide you with a high quality gap insurance policy for your fleet of vehicles. Because if you have invested in a new vehicle, whether it’s a car or a HGV, you want to ensure that should an accident occur you are covered for the full cost of the vehicle, not just it’s value at the time.
GAP insurance (Guaranteed Asset Protection) is an insurance policy that is designed to cover the gap between the amount owed on a vehicle and its actual value in the event of an accident.
How much is GAP Insurance?
The cost of your insurance policy can depend on the value of your vehicle, the number of vehicles you want to insure, and the term length of your agreement.
Our GAP insurance policy is designed for fleet operators and cover starts from just £65.40 per vehicle. The vehicles we can cover include cars, vans, light goods vehicles and heavy goods vehicles.
Obtain a fleet GAP insurance quotation in seconds by completing our online quotation form or calling one of our knowledgeable team on 0345 224 5329
In the event of an accident, vandalism, fire, theft or flood, whereby the vehicle is written off, an insurer will only pay out the market value of the vehicle at the time of the loss.
This could be much less than the outstanding finance left on the vehicle which would result in you being responsible for the shortfall.
Fleet GAP insurance will ‘Top Up’ and pay the difference between the motor insurer’s settlement figure and the outstanding amount owed to the finance/lease company; or 25% of the motor insurer’s total loss settlement figure. *Whichever calculation is the greater*
For example, if you finance a £20,000 car. A couple of weeks later one of your employees is unfortunately involved in an accident and the car is badly damaged or written off. Your standard insurance policy will only pay the value of the car, which is now only £16,000. However, you/your business still owe the dealership the full amount of £20,000, this will then leave you with £4,000 debt.
Don’t fear, If you had purchased a GAP insurance policy through Fleetcover you would be covered for this shortfall, and the GAP insurance would pay out the remaining £4,000.
Also, with our fleet gap insurance policy we will provide a temporary replacement vehicle following a total loss, so you and your business can keep travelling whilst the claim is ongoing. *This applies to cars and light vans only*
Is my car eligible for GAP Insurance?
A common question that many of our customers ask is if their vehicle is actually eligible for GAP insurance. If your vehicle falls under any of these categories then you are eligible and should consider getting a GAP insurance quote today;
- Applies to vehicles under 10 years old whether on lease, finance or owned outright (private or dealer sale) inception of the policy
- Mid term adjustments can be notified as and when they occur, pro-rata adjustments charged by insurers
- It is just as important to consider GAP to customers whether they have financed or have purchased vehicles outright
- covers both new and used vehicles
- Top up Fleet GAP is an annually renewable insurance policy exclusive to insurance brokers
What does Gap Insurance not cover?
General exclusions that apply to GAP Insurance include;
- Finance from another vehicle – Negative equity
- Where a vehicle is replaced under new car replacement extension
- A vehicle that has been modified outside of manufacturers specification, this is not applicable for commercials and HGV’s where the coach build is deemed to form part pf the vehicle
- HGV trailers or equipment being carried by HGV such as forklift trucks etc
- Vehicles that are used fro track days/rallying/competitive events
- Any claim where your vehicle has not been declared a total loss
- Any amount deducted from the motor insurer settlement as a result of failure to properly maintain/service the vehicle
- Any excess over £250.00
- Vehicles insured under a motor trade policy
- Vehicles not insured comprehensively
Can you get GAP Insurance after you buy a vehicle?
You should purchase GAP insurance at the earliest point after buying a vehicle, your dealership may even offer you this insurance but we recommend finding a specialist insurance broker like ourselves to secure the best price for a policy that is suitable for your specific needs. Some businesses have a 180 day purchase limit, whilst we don’t enforce this we would recommend getting GAP insurance as soon as possible after your purchase.
How long is GAP insurance valid for?
This depends on how long you want this cover to last, we usually offer a minimum of a year cover, but if you want this to be extended we can meet your needs. Policies typically last for 3 or 4 years.
The length of your policy will affect the cost of your GAP insurance but it can save you time and effort to secure a longer policy so you don’t have to keep renewing it each year.
Why might you need GAP insurance?
GAP insurance is a beneficial policy to have for many vehicle owners and businesses, particularly if the vehicle is less than 10 years old, and is of value. Our customers typically include those that have a fleet of vehicles from haulage companies to food delivery service providers.
Do you need GAP insurance if you have full coverage?
GAP insurance is not a legal requirement, however it is recommended when buying, loaning or leasing a new vehicle (up to 10years old). This insurance is usually an additional insurance policy to your standard fleet insurance.
Is GAP insurance only for financed cars?
No, not necessarily. GAP insurance policies can cover cars that are leased, financed or fully owned. Essentially you should consider it if you have a vehicle that is new to 10 years old and you can take out the policy at any time between this. So, if you have had your car for a year and haven’t taken our GAP insurance then fear not, just act quickly and get your GAP insurance quote today.
An Example of GAP insurance
After a total loss, the insurance company pays out £26,500, however, the termination charge from the leasing company is £27,613.71.
This would leave a shortfall of £1,113.71. Our GAP insurance policy covers the difference between the motor insurer’s settlement and the outstanding amount owed to the finance or lease company or 25% of the motor insurer’s total loss settlement figure – whichever calculation is greater.
Using the example above we pay:- £6,625 (25% of the settlement amount).
To learn more about our gap insurance options, please get in touch with our friendly team.
Alternatively, feel free to call us on 0345 224 5329.