Gap Insurance is a simple, financial protection, that can be used to cover the cost of depreciation of your motor vehicle. However it is important to understand that you can only claim on your Gap Insurance in very specific circumstances.
The only time you may claim on Gap Insurance cover is immediately after your motor insurer deems a vehicle a ‘total loss’ and beyond economic repair.
Gap Insurance for a ‘total loss’
There is a common misconception that the term ‘total loss’ or ‘write off’ is restricted to vehicles involved in an accident, but this is not the case. ‘Written off as a total loss’ could be the result of an accident, fault or non fault, a fire, theft or flood. Providing your motor insurer settles your claim as a total loss for any of these circumstances, then your Gap Insurance should be perfectly valid to claim on.
Indeed of all the Gap Insurance products we looked at, then they all seem to be designed in a similar manner in this regard.
Where Gap Insurance may not pay out
Let’s consider some situations where your motor insurer may not pay out, and therefore you could not then claim on a Gap Insurance policy. These could include:
Drink driving – if a total loss occurs whilst the driver was over the legal blood alcohol limit then not only may they be subject to a prosecution, but their motor insurer is unlikely to cover them either. If this is the case, your Gap Insurance would be void also.
Negligence – an example would be is you were to leave the keys for your vehicle on the front seat, and walk off to pay at a petrol station, then any subsequent theft may well be seen as negligent by you motor insurer. If this is the case then your Gap Insurance could not be claimed on either.
So as a general rule, if your motor insurer settles any claim as a total loss, then your Gap Insurance should cover you for the same incident, be it fire, theft, flood or accident. Nice and simple.