So how do you pick a claim limit and how does it affect you?
Picking a claim limit is almost as important as picking a level of cover. Pick the wrong one and no matter what level of cover you an bought it may not be able to fully protect you.
Let me show you just how important picking a suitable claim limit is for Return to Invoice Gap Insurance.
For example lets say you where lucky enough to have bought a £40,000 vehicle. You wisely decided to protect yourself with retrun to invoice gap insuracne and chose a claim limit of £5,000.
Two and a half years later your vehicle is stolen.
You own motor insurance company pay you the market value which based on the rough rule of thumb is approximately 50 less than the invoice price.( the average vehicle can loose up to 50 % within the first three years of its lifetime). This is £20,000.
Return to invoice Gap insurance is designed to pay the difference between your vehicles value and the invoice price you paid, but in this case you have chosen a maxium claim limit if £5,000.
Ok so what does it mean to you?
The claim limit means that instead of being send a cheque for the other £20,000 to take you back to the invoice price you paid the maximum that your policy can send you is £5,000 leaving you with a shortfall of £15,000.
A much more suitable claim limit for this value of vehicle would have been £20,000 ( although this is cutting it fine) or even £25,000.
Remember it is always your choice but the very last thing that you or in fact your gap insurance provider wants is for you to realise at the point of claim that you have chosen the wrong claim limit.
So why not get a gap insurance quote look at claim limits which are approximatley 50 % less than the invoice price. While this is not an absolute guarantee it is a very good rule of thumb. After all when it comes to claim limit more is most definitely more and in most cases it will cost pennies to jump to a higher limit.