If you buy a Gap Insurance policy, then surely all cover is the same? Think again! You can compare two different styles of Return to Invoice policies, even underwritten by the same insurer, and find differences between the levels of cover.

Lets look at some examples

Gap Insurance differences

Lets consider one of the most popular forms of Gap Insurance today, Vehicle Replacement Insurance. This type of Gap will cover you back to the cost of replacing the vehicle, with an equivalent vehicle in the future, sounds simple enough?

Well you may want to look closely at how the policy may perform in the event of a claim. Many VRI Gap Insurance policies in the market will pay a nominated dealer, who will then replace the vehicle on a ‘like for like’ basis. So if you had a one year old Vauxhall Astra, then replace with another one year old Vauxhall Astra.

Gap Insurance compare

Are all Gap Insurance policies the same?

Now this seems great of you have only had the vehicle a year or so, but what if your claim was made 3 years down the line, and really you wanted another type of vehicle alltogether?

Well you can get Vehicle Replacement Insurance that will pay you, as the policyholder, instead of the dealer. If you want to then get a different vehicle altogether, then that is up to you.

What is covered when you make a claim? Very often these days you will find up to £1500 of dealer fitted accessories are covered, but did you know that expensive Paint and Fabric Protection products are often excluded from this? If you find a Gap Insurance policy that will cover your Paint and Fabric Protection cost, then this can make a difference of £300-£500 on your claim.

Gap Insurance Claims process

This is an aspect that is not always obvious, but again can effect your financially. Most Gap Insurance policies do not commit to a time frame that they aim to pay within. Some boast of having payments made within 3 or 4 weeks, and in some cases this would be fine. However, if you have a finance agreement on your vehicle, then unless the payment is made to clear the finance very quickly, you could accrue interest and/or penalties from your finance company.

Gap Insurance claims should be quite straightforward, and insurers should have processes in place that ensure you are paid quickly if a Gap Insurance claim is made. If your policy or broker cannot give you a clear guide on this, then perhaps the compnay is not as geared up for this as they may say.

Some Gap Insurance policies actually have a written commitment to pay you within a short time frame. It may be worth considering how important the speed of the payout is to you.

So in conclusion, not all Gap Insurance policies are as similar as you might think!

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