The following is a general description of the features and benefits typically available to policyholders. It is not intended to be a complete summary of the policy cover available as such cover will vary between Insurers.
With each quotation provided by Aldium a Key Facts Summary of Cover will be supplied for the particular Insurer recommended.
There are in essence two types of GAP available to you.
Finance GAP
Should your vehicle be declared a write-off by your motor insurers because of a theft or an accident, there may be a shortfall between what the motor insurers pay you and the value required by the lease/finance company to settle the lease/finance agreement.
The shortfall could be a significant sum depending on the rate of depreciation of your vehicle and the remaining period of the lease/finance agreement. Finance GAP protects you by paying this shortfall for you.
Return to Invoice GAP (also called Purchase Price Protection GAP)
Should your vehicle be declared a write-off by your motor insurers because of a theft or an accident, there will be a shortfall between what the motor insurers pay you and what you originally paid for the vehicle.
The shortfall could be a significant sum depending on the rate of depreciation of your vehicle but Return to Invoice GAP will bridge this gap.
FINANCE GAP
What is covered
Depending on whether a lease agreement or finance applies, Insurers will pay up to the sum insured for the amount you owe following the total loss of your vehicle where the termination charge, less any applicable rebates or refunds, or the finance value exceeds the insured value of the vehicle.
The terms of the lease or finance agreement would have to be checked to establish definitions for expressions used above but, typically, a termination charge would represent the amount due to a lease company excluding arrears, recoverable VAT, maintenance and warranty charges, insurance premiums, road tax, excess mileage charges and administration fees.
Provisions
There are various provisions which apply to Finance GAP cover:
- The vehicle will usually have to be under a certain age, typically 5,7 or 10 years, at the start of the policy.
- You are named as the customer in any lease.
- Your vehicle is shown in Glass’s Guide.
- Your monthly payment does not exceed a certain level.
- The gross vehicle weight does not exceed a certain level.
- The purchase price does not exceed a certain level.
- You have paid the premium for the cover.
- The incident which brought about the total loss occurred within the period of insurance.
- The incident which brought about the total loss occurred within the territorial limits.
- The vehicle is covered by a motor insurance policy.
- The vehicle has been supplied by an authorised UK distributor.
What is not covered
- If the motor insurance has not been settled as a total loss.
- Any excess which the motor insurers have deducted.
- Your vehicle if it is not shown in Glass’s Guide.
- Your vehicle if it has been modified except in accordance with manufacturer’s specification.
- Your vehicle if it has been manufactured by Aston Martin, Bentley, Ferrari, Lotus, Maserati, Rolls Royce, TVR or in the USA and is not right hand drive.
- Your vehicle if it has been manufactured in the USA and been directly imported from there rather than via an authorised UK distributor.
- Your vehicle if it is used as an emergency vehicle, bus, truck, heavy goods vehicle, motorcycle or invalid carrier.
- Your vehicle if it used for road racing, rallying, pace-making, speed testing or any other competitive event.
- Any loss of use or any other indirect losses.
- Total loss by theft if the person who committed the theft had access to the keys of the vehicle.
- Theft or malicious damage claims not accompanied by a valid crime reference number.
- Any loss that occurred due to an intentional act or wilful neglect including the vehicle driven by a person who did not hold a valid licence or was intoxicated by alcohol or drugs.
- Your vehicle if used for daily or weekly rental purposes.
- Any finance carried across onto your vehicle from previous finance arrangements.
The above is not a complete list of all policy exclusions and neither do all Insurers impose all of the above. It is intended to be representative of the most significant exclusions which usually appear.
You should also read the General Exclusions section of the relevant policy.
RETURN TO INVOICE GAP
What is covered
Up to the sum insured and following the total loss of your vehicle, Insurers will pay the difference between what the motor insurers pay and the amount for which you purchased the vehicle.
Provisions
There are various provisions which apply to Return to Invoice cover:
- The vehicle will usually have to be under a certain age, typically 5,7 or 10 years, at the start of the policy.
- The vehicle will have had to be purchased less than 90 days before the start of cover.
- You are the owner or registered keeper of the vehicle.
- Your vehicle is shown in Glass’s Guide.
- The gross vehicle weight does not exceed a certain level.
- The purchase price does not exceed a certain level.
- You have paid the premium for the cover.
- The incident which brought about the total loss occurred within the period of insurance.
- The incident which brought about the total loss occurred within the territorial limits.
- The vehicle is covered by a motor insurance policy.
- The vehicle has been supplied by an authorised UK distributor and not purchased via a private sale.
What is not covered
- If the motor insurance has not been settled as a total loss.
- Any excess which the motor insurers have deducted.
- Your vehicle if it is not shown in Glass’s Guide.
- Your vehicle if it has been modified except in accordance with manufacturer’s specification.
- Your vehicle if it has been manufactured by Aston Martin, Bentley, Ferrari, Lotus, Maserati, Rolls Royce, TVR or in the USA and is not right hand drive.
- Your vehicle if it has been manufactured in the USA and been directly imported from there rather than via an authorised UK distributor.
- Your vehicle if it is used as an emergency vehicle, bus, truck, commercial vehicle in excess of 3.5 tonnes, motorcycle or invalid carrier.
- Your vehicle if it used for road racing, rallying, pace-making, speed testing or any other competitive event.
- Any loss of use or any other indirect losses.
- Total loss by theft if the person who committed the theft had access to the keys of the vehicle.
- Theft or malicious damage claims not accompanied by a valid crime reference number.
- Your vehicle if used for daily or weekly rental purposes or is financed.
- Any loss that occurred due to an intentional act or wilful neglect including the vehicle driven by a person who did not hold a valid licence or was intoxicated by alcohol or drugs.
The above is not a complete list of all policy exclusions and neither do all Insurers impose all of the above. It is intended to be representative of the most significant exclusions which usually appear.
You should also read the General Exclusions section of the relevant policy.
General Exclusions applicable to both types of GAP
Total losses which have arisen due to:
- War, riot, civil commotion or similar.
- Terrorism
- Pollution or contamination.
- Ionising radiations or radio active contamination.
- Earthquake.
- Pressure waves from aircraft or other aerial devices travelling at sonic or supersonic speeds.
- Fraud or dishonesty.
The above is not a full list of all General Exclusions to be found in GAP policies.