A large percentage of motorists believe that their comprehensive insurance policy would pay out the full amount for their vehicle if it were to be written off, but this is not the case. A comprehensive insurance policy will only pay out the current market value of an automobile in these situations which could leave a motorist without a vehicle and out of pocket by thousands of pounds due to depreciation.
As an example, if a motorist were to purchase a car for £19,000 and it was written off after three years of ownership, the comprehensive car insurance policy would pay £8,850 (based on average depreciation rates) which would leave a shortfall of £10,450. That is a shortfall of over 50% which would make it hard to afford a suitable replacement.
Fortunately, there is a solution to this problem in the form of GAP insurance. This is an optional policy where the provider would cover the shortfall or the amount outstanding on the finance agreement. This helps the motorist to protect their investment and have peace of mind knowing that they are properly protected.
Why it is Important
Some motorists may say that this is an unnecessary form of cover as they are an excellent driver, but this does not matter. Accidents occur all the time on the roads and your car could be written off even if the accident is not your fault. Not only this, but insurance companies declare automobiles a total loss when they are stolen and never recovered or damaged by fire and car crime is a huge problem in this country. It is for this reason why a GAP insurance policy is an intelligent investment for any motorist.
You may be offered GAP insurance when you purchase a vehicle, but for the best levels of cover and best rates it is important to obtain your policy from a specialist provider. This will help you to avoid clauses which restrict payments and find flexible cover that suits you with fewer exclusions.
Driving can be dangerous and write offers occur far too often. This could leave you without a car and out of pocket by thousands of pounds if you do not protect your investment with GAP insurance, which will cover any shortfall and make sure that you can quickly get behind the wheel once again. These policies can be affordable and easy to arrange so that you have peace of mind knowing that you are protected.