Many times you will see a Gap Insurance policy described as ‘combined’, ‘combo’ or possibly ‘plus’ but what do these terms mean? Well the standard types of cover that often feature these terms are either Return to Invoice or Vehicle Replacement Insurance, whereby the standard cover is to protect either the original invoice price or the equivalent replacement value. By adding the term ‘combined’ another element is covered as well, your outstanding finance settlement.
How Combined Gap Insurance works
If you take a Combined Return to Invoice product, then you can be covered for the outstanding finance settlement OR the original invoice price, whichever is the higher amount when you make your Gap Insurance claim. So if the vehicle is deemed a total loss by your motor insurer, and is now worth £10,000 then if your original invoice price was £15,000 and your outstanding finance settlement £12,000 then how would your combined cover work?
In this example the original invoice price of £15,000 is higher than the outstanding finance settlement of £12,000. So in this case the Combined Return to Invoice policy would top up the £10,000 market value settlement from your motor insurer to the £15,000 you originally paid. This means that out of the total £15,000 you receive then you can settle your finance at £12,000 and have £3,000 left over for a replacement vehicle.
If you were in a position where your finance settlement had been £15,500 and the original purchase price £15,000 (albeit this situation would be rare), then your combined cover can protect to the finance settlement even though that is higher than the original price your paid.
So as you can see, simply having a ‘combined’ product can offer you twice the protection of a stand alone Gap Insurance policy.