What is Gap Insurance?
If your vehicle is written off as a result of an accident, your insurance pay-out is based on the market value of the vehicle at the time of the accident. If you bought your vehicle on finance, that could mean you still owe more to the finance company than you receive from your insurer, leaving you with a hefty shortfall. Gap insurance meets that shortfall for you and is a very affordable cover.
How Does Gap Insurance Work?
The following is a sample scenario you might see in a Gap Insurance claim, if the vehicle was written off before the finance on it is settled:
- Motor insurance settlement following write off: £6,000
- Early settlement figure from finance company £7,200
- Shortfall £1,200
- Gap Cover would pay the shortfall of £1,200
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