What is GAP Insurance?

What is GAP Insurance?

GAP (Guaranteed Asset Protection) insurance, covers you if you are unlucky enough to have your vehicle written-off in a road collision or if your car is stolen and not recovered. It reduces the risk of you having to make insurance repayments when the car is no longer in your possession due to unforeseen circumstances.

There are four different types of GAP insurance that your car dealer can offer you: Finance GAP insurance, Return to Invoice (RTI) GAP insurance, Return to Value (RTV) GAP insurance and Replacement GAP insurance.

Finance GAP Insurance

With finance GAP insurance, the difference between the settlement amount that the insurance company pays out and how much outstanding finance remains for the car will be paid.

Return to Invoice (RTI) GAP Insurance

With return to invoice GAP insurance, sometimes known as ‘Back to Invoice insurance’, the difference between the amount the insurance company paid for the written-off vehicle and the amount you paid for the car will be paid.

RTI GAP Insurance is only an option for cars that are less than seven years old, and the insurance policy must be taken out within three months of you purchasing the car.

Return to Value (RTV) GAP Insurance

Return to Value GAP insurance pays the difference between the insurance settlement amount and how much the vehicle was originally worth when your policy was taken out. This is also only available for cars that are no more than seven years old.

Replacement GAP Insurance

A Replacement GAP Insurance policy pays the difference between how much the insurance company paid out as a settlement amount, and how much it would cost to replace the written-off car with an identical make and model. This is only available for cars that are new or ex-demo, and are less than three months old.