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Agreed Value Gap Insurance

Saturday 9th February 2013 14:23:06

Agreed Value Gap Insurance provides protection for a vehicle which is older than 180 days.

Agreed Value is unique as Gap Insurance is originally designed to protect your vehicle against the depreciation your vehicle will undergo, from as soon as it leaves the show room. Industry experts say that the average car will loose up to 50% of its invoice price in the first three years. Although a car still depreciates after the sixth, seventh and eight and so on, the most it will ever depreciate is in the first three years.


This is why the two most popular forms of Gap Insurance, Return to Invoice (RTI) and Vehicle Replacement (VRI) can only protect your vehicle if it is less than 180 days old at the time of taking out the policy. Agreed Value Gap Insurance protects the market value of your vehicle at the time of taking out the policy. The Gap Insurance provider will use an independent source, known as Glass's Guide (Google and check them out) who will provide the current market value of your car. This figure is then protected, ring fenced, written in the sand by your Gap Insurance provider. Please see the following illustration:

  • Mark buys a Toyota Yaris from his best friend.
  • The Toyota has a market value of £10,000.
  • Mark takes out Agreed Value Gap Insurance, who protects this £10,000.
  • Two years down the line, the Toyota is written off.
  • His comprehensive insurer pays Mark £6,000 as this was the market value at the time it was written off.
  • Given that Mark was protected by Gap Insurance, who protected the original £10,000, he was paid the outstanding £4,000, the Gap, which it is commonly known as.

The Gap Insurance provider will also pay Mark £250 towards his comprehensive insurance excess.

Call or click today to find out more or for a quotation from Shortfall

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