Gap Insurance – Information You May be Unaware Of

GAP insurance protects you if you write off your car and your car insurance policy doesn’t pay enough to settle any outstanding loans on it or the cost of replacing it.

GAP stands for Guaranteed Asset Protection. There are different types of GAP insurance cover available. They basically cover the difference in the amount your car insurance company pays out if the car is a total write-off compared with what you still owe on any loans or finance or the amount you have to pay to replace the car.

GAP insurance is becoming increasingly popular due to the high depreciation costs on cars and their falling resale prices.

Return to Invoice GAP insurance (RTI Gap Insurance). You can buy RTI GAP insurance for cars less than seven years old. However it can only be obtained within three months of buying the car. It repays the difference between your car insurance claim settlement total and the amount you bought the car for, the invoice amount for the car.

Return to Value GAP insurance (RTC Gap). You can buy RTV Gap insurance for cars aged between 3 months and 7 years only. It pays the difference between your car insurance claim settlement amount and the value of your car at the time you took out the policy.

Replacement GAP insurance. You can buy replacement GAP insurance to insure the cost of replacing your car with the same make and model as you originally bought. This can only be purchased for new or ex demo cars that are less than three months old and this insurance has to be arranged within ninety days of buying the car.