Did you know that you could be out of pocket by thousands of pounds if you were to write your vehicle off? This is because insurance companies will only pay the current market value for your car, which could leave you short of thousands of pounds due to depreciation and make it hard to afford a replacement. Fortunately, there is a solution to this problem – gap insurance.
What is Gap Insurance?
So, what is gap insurance? This is an optional type of policy that will cover the shortfall between the amount originally paid and the insurance payout in the event of a write-off. If the vehicle is on finance, gap insurance can cover the amount outstanding so that you do not have to pay money for a car that no longer exists.
The Pros of Gap Insurance
The key benefit of gap insurance is that it provides financial protection. Cars depreciation by as much as a third after one year and over half after three years, which means that you could be short by a hefty amount without gap insurance in place. This also means that you have peace of mind when you have gap insurance in place with the knowledge that you are protected if you are involved in an accident or the car is stolen and never recovered.
The Cons of Gap Insurance
Gap insurance is not required by law and it is an extra cost to consider. As a result, many people question is gap insurance worth it? This is understandable, but you have to consider that driving is dangerous and there are accidents every single day. You could do nothing wrong and still be involved in an accident that results in a write-off and even low-speed collisions can see a vehicle written off. Additionally, car crime is a growing problem in the UK with cars that are never recovered.
Is it Expensive?
It is understandable that motorists would be deterred by yet another cost to cover each month, but it does not have to be a big cost. As with any type of insurance, there are many options and it is important to shop around to get the best deal and level of coverage for your needs. You can get the best deals by getting your policy from a specialist as opposed to from a dealership.
As you can see, gap insurance is a sensible level of cover that every motorist should consider. Accidents can happen out of nowhere and it is easy for a car to get written off, which could leave you in a sticky financial position if you do not have gap insurance in place. Gap insurance can offer financial protection in the region of thousands of pounds, plus you will also benefit from important peace of mind knowing that you have protection in place.
