What is GAP Insurance?
GAP stands for Guaranteed Asset Protection. GAP insurance is designed to effectively bridge the potential shortfall between the amount you paid for a vehicle, and the amount your comprehensive motor insurance policy pays out.
Why could there be a shortfall? As soon as you take ownership of a motor vehicle, its value starts to depreciate. And remember, when settling a total loss claim, insurers will only pay out the current market value of the vehicle. Not what you paid for the vehicle. And this can mean there is a difference in what you paid for the vehicle, and what your insurer will pay out. This issue can be particularly evident if your vehicle is leased or provided on a contract hire basis as these types of agreement are not designed to be terminated early.
Also keep in mind that when settling total loss claims, insurers will typically use an average of CAP and Glasses Guide valuations to calculate the market value. This can further reduce the value attached to the vehicle.
GAP insurance can provide the reassurance that in the event of a total loss claim, your original investment is protected.
What are the benefits of a GAP Insurance policy?
For full details of the benefits that a GAP insurance policy purchased through Anthony Jones can provide to your fleet do take a look at our leaflet on fleet GAP cover
Our GAP cover for fleets can:
- In the event of a total loss, the policy pays the outstanding amount owing to the finance/lease company or 25% of the motor insurer’s settlement figure up to the maximum indemnity limit whichever is the greater*
- Provide an additional layer of financial protection to your fleet or business
- Limit your exposure to hefty early termination charges that a lease or contract hire agreement may impose
- Extend to include a temporary replacement standard car or van up to 3.5T GVW for up to 42 days once the motor insurer has confirmed the total loss. The temporary replacement vehicle will include motor insurance
- Cover a selection of vehicles, or your entire fleet. All company vehicles can be covered, not just those on finance or leased
Who needs GAP Insurance?
We are increasingly seeing our commercial motor insurance customers investing in this product. We would recommend a GAP insurance policy to any fleet operator, no matter how many vehicles that you own or lease.
If you have any exposure linked to your financial investment in a vehicle, then GAP insurance is worth investing in.
If you are considering GAP insurance do watch our short video on this valuable cover for more information
How much can GAP Insurance cost?
Whilst the costs of GAP Insurance policies vary depending on a range of factors, but as an example prices can start from as little as £75 + IPT per year for a mini mixed fleet (correct as at May 2021)
As an experienced commercial motor insurance broker, Anthony Jones are well placed to help you obtain the appropriate protection in place for your vehicles and your motor fleet insurance. Chat to us today on 020 8290 9099 or email us at commercial.motor@anthonyjones.com.
*Subject to policy terms and conditions that are available on request. Vehicles must be comprehensively insured. The policy will provide cover for 12 months and is annually renewable. The maximum the policy will pay in the event of a claim per vehicle is £20,000 for Cars and Light Vans (up to 3.5 GVW), £20,000 for Vans (3.5T – 7.5T GVW), £25,000 for Trucks (7.5T – 44T GVW). All policies are administered by Virtual Insurance Products Limited t/a Jackson Lee Underwriting. Authorised and regulated by the Financial Conduct Authority (307038).
