Vehicle Replacement Gap Insurance
Vehicle replacement gap insurance provides more coverage than your regular motor insurance. Gap insurance is not required by the law; however it can be beneficial to you. We will give you an overview of what vehicle replacement gap is and then look at why you might consider it.
Vehicle replacement gap insurance will cover you in the event that your vehicle is written off as a total loss. A total loss is when the repairs to the vehicle caused in an accident or other incident are more than the cars value. With gap insurance it does not matter whether you paid for the car out right or used a loan. However, it is most beneficial to individuals who have a loan on the vehicle.
If your car is written off, vehicle replacement gap insurance will cover you to get a brand new car. The insurance pays for the difference between the current retail price and what the motor vehicle insurance has paid. In this type of situation the motor vehicle insurance company pays only for what the value of the car is rated at.
Motor vehicle insurance pays for what your car has depreciated to. As most of you know, as soon as you drive off a car lot your car will depreciate. In some cases the car price for a new replacement will be more than you originally paid. Your vehicle will also lose up to 77 percent of its value in three years. Every minute of the day a vehicle is stolen in the UK, which tells you how much danger of theft there is. About every year in the UK 500,000 cars are considered to be a write off. These statements show you why it is important to have gap insurance, especially if you just purchased your vehicle.
You should not have to fear losing a car and being responsible for the payments. Accidents occur, and this is why gap insurance can certainly help relieve the fear. There are some terms and conditions to the gap insurance for vehicle replacement.
First, only vehicles that are new, ex- demonstrators or pre- registered up to three months qualify. Also, gap insurance for vehicle replacements do have a cap of £25,000 regarding refunds. The car is covered for £50,000 total. You must have less than 500 miles on the vehicle at the start of the gap insurance policy. As we previously mentioned it does not matter how you paid for the car, as long as it fits the above restrictions.
The benefits of gap insurance:
• The insurance covers vehicles 3 months or younger
• The amount you can get back will cover depreciation or inflation
• Your investment is soundly protected
• You also get a new vehicle if your car is considered written off.
Your regular vehicle insurance will not cover such things. Regular vehicle insurance covers only up to the value of the car as it currently stands. It also can total the vehicle without covering the entire loan amount that you have on it.
There are some restrictions to the policy we have yet to mention. Vehicles that do not have proper comprehensive insurance, which you should have on a new vehicle, will not be covered. If you have a non manufacturer specified modification on the vehicle it will not be covered. In other words you cannot make changes to the vehicle or you will nullify the gap insurance.
Any vehicle that you drive for hire, racing, haulage, or go off road with will not be covered. For instance you might own an SUV which allows you to go off road; however, if the damage or accident occurs as a result the vehicle replacement gap insurance will not cover it.
The vehicle has to be driven by the person covered under the gap insurance. If another person was driving, the gap insurance will not pay for the replacement of the vehicle. Gap insurance is designed to ease your fears about an accident. Once you have the gap insurance it will cover the total amount of a replacement. Your premium will be designed based on the risk you might pose to the insurance company. A person who has been in multiple accidents, drunk driving issues, etc may not be eligible for coverage. As with all insurance, vehicle replacement insurance is set up for the unlikely events with a sound driver behind the wheel. The premiums may seem a little high, but consider the relief you will feel.
