Which claim limit do I need?
How do I calculate the claim limit?
How do I pick a claim limit?
How dose claim limit affect a gap insurance policy?
These issus of claim limit is one of the most frequently asked questions.
You see when it comes to picking a claim limit there is no hard a fast rule.
There is no magic calculation on which you can apply to find the perfect claim limit. What we can do though is look at how to pick a logical claim limit, a claim limit appropriate for your vehicle?
To re-cap the claim limit is the maximum amount that you will ever be able to claim from your gap insurance policy. No matter how long the policy is for, no matter what style of gap insurance you have chosen it is the absolute maximum.
So it stands to reason that the claim limit you chose will need to be bigger than the amount your vehicle will loose. Your dealership will skirt over the issue as after all in involves thinking about how much your new vehicle will loose in a set number of years. No one really if the truth be known likes to think that the bright shinny new vehicle they are buying will be worth much much less in say two three or four years time.
But a sad fact of life is that every vehicle from cars to motor bikes and motor homes will loose value over time. How much can vary from manufacture to manufacture and model to model.
As a very very rough rule of thumb the average vehicle will lose up to 50% within the first three years of its life time. A excellent guide although not for the faint hearted is “what cars deprecation calculator”
The calculator allows you to pick a make and model ( sorry cars only) and using their expertise and historical data predict what your car will be worth in a one, two, three and four years time.
The amount your vehicle will lose is essentially how much you will need to cover in your claim limit.
Dont forget that is you are buying a vehicle replacement style of cover your claim limit will not only need to allow for how much your car will loose but also how much inflation will add to the cost.