If you’re planning on buying a new car, you may want to consider adding a GAP insurance policy. There’s a lot of different types of insurance you can take out on your vehicle, but GAP insurance can prove particularly useful. It doesn’t have to be a new car, but this type of insurance does tend to give back more to those who do buy brand new vehicles.
Here, you’ll discover exactly what GAP insurance is and the types of things it covers.
What is GAP insurance?
The majority of insurers will typically provide cover for the Actual Car Value (ACV). However, as you may already know, cars depreciate in value over time. This means, what you paid for the vehicle and what it’s worth at the time of your claim could be totally different. If the insurer only pays out for the current value of the car, you could find yourself unable to afford to replace the car.
GAP insurance is there to make up the difference. So, however much you’re short from what you paid for the car, the GAP insurance policy will cover you.
What does it cover?
When you take out GAP insurance from a provider such as ALA, it provides cover for your entire vehicle. It also pays out if your vehicle is stolen and cannot be recovered. If you owe money on car finance, it provides the negative equity required to pay off the finance before you can get a new vehicle.
What doesn’t it cover?
There are some things GAP insurance doesn’t cover so it’s worth being aware of these when making your decision of whether or not to take it out. Firstly, it doesn’t cover damage to property or bodily injuries. It purely pays for damages to the vehicle.
It also won’t cover deductible costs, death or engine failure. It only pays out if you suffer a total vehicle loss, whether that be via an accident or theft. So, you won’t be able to claim for loss of wages, funeral costs or medical expenses.
Overall, GAP insurance can be a great add-on policy to have. This is especially true if you are buying a new car as they tend to lose a third of their value the minute you drive them. If you couldn’t afford to replace the vehicle if something were to happen, GAP insurance is definitely a policy you’ll want to have.
The post What is GAP Insurance and What Does it Cover? appeared first on Statii News.
source http://news.statii.co.uk/what-is-gap-insurance-and-what-does-it-cover/
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