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Gap Insurance - What, why, when?

What is it? | Why should you buy it? | When should you buy it?

Updated 5th November 2018


What is Gap Insurance and how does it work?


Gap Insurance (or Guaranteed Asset Protection to give it it's grand title) is an insurance policy that can cover an element of the depreciation in value of a vehicle in the event that the vehicle is 'written off' following a fire, theft or accident by a motor insurance company.


There are different areas of financial loss you may want to cover; if you have a lease you may want to ensure you can cover your lease settlement or if you bought the vehicle outright you might want to ensure you can recover all your money back. This guide will help you understand your options, the risks that Gap Insurance can cover and what options can offer to you.

Which Gap Insurance?


Which Gap Insurance?


There are different kinds of Gap Insurance, and these will protect you in different ways. The types we offer at would be:



Combined Return to Invoice Gap - to cover the difference between the motor insurance settlement and the higher of either the original invoice price you paid or the outstanding finance settlement.


Vehicle Replacement Gap - to cover the difference between the motor insurance settlement and the higher of either the replacement cost of the equivalent vehicle to the one you first purchased.


For example, if the original vehicle was brand new then another brand new one matching all factory options), the original invoice price you first paid or the outstanding finance settlement at the time of claim.


Contract Hire/Lease Gap - to cover the difference between the motor insurers settlement and the outstanding lease settlement at point of loss. Also available, as an additional option, you may cover your Advanced Rental (up to 6 payments capped at a maximum of £2000) for an extra premium.


Agreed Value Gap - to cover the difference between the motor insurers settlement and the Agreed Value (based on 105% of Glass Guide Retail Valuation) on the day you buy the policy. This policy is not something that is offered on new car purchases. It is available when you

have owned the vehicle more than 180 days and you want to protect the current value of the car on the day of policy purchase.



Return to Invoice Gap Insurance - Terms and Conditions PDF    Vehicle Replacement Gap Insurance - Terms and Conditions PDF    Lease & Contract Hire Gap Insurance - Terms and Conditions PDF


Why Choose for Gap Insurance?


Being part of Aequitas Automotive Ltd, we are one of the UK's leading Gap Insurance providers, along with sister brands Gap Insurance 123, Easy Gap and Policies are currently underwritten by financially 'A' rated, Mapfre, with claims handled by Abraxas based in Bristol.


Gap Insurance Policy Features at

Being amongst the market leading providers in the UK, we provide such a high volume of policies that we can include some excellent features as standard.


Trusted Underwriting Insurer - Policies are underwritten by Mapfre | Abraxas with claims handled by the team in Bristol. Financially 'A' Rated and over 85 years of underwriting experience, Mapfre | Abraxas have established themselves as being one of the biggest underwriting insurers for Gap Insurance in the UK. They currently underwrite a lot of policies that are offered by the main dealers themselves.


£750 Excess Contribution - There is no excess for you to pay when making a claim on the policy. Instead, if you have to pay an excess on your motor insurance policy in the event of a total loss, we will contribute the first £750 towards your motor insurance excess.


Flexible Policy Cover - You have the ability to select your policy length from 1-4 years, rather than just having a set term of 3 years. If you would like a 5 year quotation for Gap Insurance, this is currently available on


Fully Transferable - If you change your vehicle, providing it still fits the same eligibility criteria, you have the ability to transfer the cover to the new vehicle at no extra cost.


Featured within the Which? Report on GAP - Which? consumer magazine have carried out a report into the sale of Gap Insurance, highlighting the difference in price between providers. come out as the best priced provider in 3 out of 3 comparisons for Return to Invoice Gap Insurance, as of October 2018.



Why Buy Gap Insurance?


Gap Insurance is an insurance policy that has come about because of three factors; vehicle depreciation, the chance that your vehicle may end up as a 'write off' and the limitations of a typical fully comprehensive motor insurance policy.


You may well find a situation where your vehicle is involved in an incident that results in your motor insurer declaring the vehicle a 'total loss', and your motor insurance only pays the market value of the vehicle at the time of claim. This is where Gap Insurance can cover your financial loss.


First, lets look at the factors that make Gap Insurance a sensible option to consider.


2018 biggest depreciating cars UK

1. Vehicle Depreciation


It is a fact of life that the vast majority of motor vehicles lose value over time.


According to experts at the likes of the AA and WhatCar? you can see over 80% depreciation in a new cars' value in the first three years of its life.


So to put some figures to that, in the recent Whatcar? report on the highest depreciating cars of 2018, the Renault Zoe is indicated to fall from £29,020 to just £5,100 in three years.


That is quite some statistic!


Of course not all vehicles will lose value so quickly but if you Whatcar? have suggested that even the slowest depreciating cars may lose around 60% of their original value in 3 years.





2. Vehicle 'write off' rate


A vehicle can be declared a 'write off' for a number of reasons. These may include accident, theft or fire. What are your chances of your vehicle becoming a 'statistic'? To be fair with over 30 million vehicles on the UK roads you would be pretty unlucky to have yours written off.


However you may want to consider some of the latest headlines, reports and data from industry experts including:


What are the chances that you become part of these statistics?


3. Limitations of a fully comprehensive motor insurance policy


A typical fully comprehensive motor insurance policy is designed to cover you against the costs of accidents, theft, fire, flood etc. This means that can cover the cost of repairs to your vehicle, following an accident for example, to put it back to the same condition it was before the accident. However, if the motor insurer deems the cost of any claim to be 'beyond economic repair' (this could be where a vehicle has £10,000 worth of repairs but may only be worth £7,000 at that time) then the insurer may opt to 'write off' the vehicle as an economic loss and instead of repairing or replacing the vehicle they will pay you the 'market value' of the vehicle in settlement.


The 'market value' is the price it would cost you to replace the vehicle, from a motor dealers forecourt at the time of claim, with the equivalent vehicle. This equivalent vehicle would be the same age and mileage as yours was at the time of claim.


Here lays the first limitation of fully comprehensive motor insurance. In only getting the 'market value' back you would be getting back far less, in most cases, than the value of vehicle at the time you first purchased it.


How much is the 'market value'?


What is the market value of a car

The market value of your vehicle will be calculated on the vehicle age, mileage and condition at the time you make your claim. Based on the data provided by the likes of the AA and Whatcar? above the market value could be significantly less than the price you originally paid. This is especially the case if you bought the vehicle brand new.


The example we can show you is of a Volkswagen Golf GTD DSG that was bought in 2015. Around two and a half years later, with only a fairly average mileage and in good condition, this desireable model has still lost nearly 45% of its original value, with a 'market value' of £16,500 to replace it now (March 2018).


Remember the 'market value' is the price that the fully comprehensive motor insurance is likely to offer you if they decide to 'write off' your vehicle after an accident, fire or theft in lieu of repairing or replacing it.


Given that nearly all vehicles lose value, and 'market value' settlement often means you have suffered a significant financial loss from the price your originally paid.




When do you buy Gap Insurance?


If you are reading this then it is probably because you are in the process of buying a vehicle from a motor dealer and they have spoken to you about Gap Insurance. This is by far and away the most common time that a Gap Insurance policy is bought.


However it is not the only time you can buy Gap Insurance. Generally speaking most Gap Insurance providers allow you a window of opportunity to buy cover. With products this is 180 days from the vehicle purchase (except Agreed Value Gap). Some providers you have a shorter period, particularly the dealer offered products, that may be 30-90 days from vehicle purchase.


You will normally find that the choices become much less if you leave looking for Gap cover for over 365 days from vehicle purchase.


Gap Insurance available at