Gap Insurance is a supplementary form of insurance that protects you against any financial loss, if in the unfortunate your Motorhome is written off or stolen.
If in the unfortunate case your Motorhome is written off or stolen, your own motor insurance company is only ever legally obliged to pay you the market value of your Motorhome at the time it was taken off the road. Even though Motorhomes normally do not lose value as quickly as other vehicles based on current and historical depreciation levels. Your settlement will still be significantly less than the original invoice price you paid. Gap Insurance can help, depending upon the level of cover that you choose you can protect any financial shortfall, the invoice price you paid or even the inflationary increased replacement cost.
It is important that you know and understand a little bit more about the different types of Gap Insurance before purchasing a policy. This will ensure that you have the right policy for yourself and your Motorhome and know that it will perform in the way you would like it to in the event of a claim.
On this page you will find examples of our four most popular policy types:
Motorhome Vehicle Replacement Gap Insurance protects you against any increase to the invoice price of your Motorhome, if in the unfortunate case it is written off or stolen.
The invoice price of your Motorhome can increase due to a host of different reasons.
Inflation, model upgrades, increases in VAT, the cost of labour and raw materials or most commonly, if an upgraded version of your model has been introduced. This means that simply getting your full purchase price back is no guarantee that you will be able to buy another.
If in the unfortunate case your Motorhome is written off, you will only be paid by your comprehensive insurer, the market value of your Motorhome.
Vehicle Replacement Gap Insurance will then pay you the difference between the comprehensive insurers settlement payment (market value) and the amount you now need to purchase another Motorhome, the same age, mileage and condition as yours originally was when you first drove it out the showroom. If that model is no longer available then settlement is based on the superseding model.
Please see the example we have provided below to assist you with your understanding:
* Isabella purchases a Volkswagen Motorhome for £75,000
* Three years down the line, Isabella awakes to find that her Motorhome has been stolen
* Isabella contacts her comprehensive insurer who inform her that they will pay her a settlement payments of £40,000
* Isabella is later informed by her local Volkswagen dealership that her original Motorhome model has now been upgraded. Better specification, road handling and trim levels but also another £5,000.
* This means that without any form of gap insurance and without using any savings the £40,000 Isabella is paid from her own motor insurance company is the only amount that she has to be able to buy another motor home and or clear any outstanding finance. Also that to purchase another Motorhome, he same age, mileage an condition Isabella's when she first bought it, she will need an additional £40,000.
In this example Isabella's Vehicle Replacement Gap Insurance policy would top up her own motor insurance companies settlement to the full £80,000 replacement cost. From this Isabella would be obliged to clear any outstanding finance if needs be and then the balance of the funds would be hers to do with as she sees fit.
Motorhome Return to Invoice Gap Insurance is designed to protect the original invoice price of your Motorhome.
Return to Invoice Gap Insurance pays the difference between your Motorhome's value on the day it was written off and the original invoice price you paid,
If in the unfortunate case your Motorhome is written off, your comprehensive insurer will only pay you the market value of your Motorhome at the time it was written off or stolen.
With some vehicles estimated to lose up to 50% within just three years and your insurer only obliged to settle your Motorhome's value on the day of loss, any settlement you receive can be and often is, significantly less than you originally paid.
Return to Invoice Gap Insurance can help protect you against this loss.
* Tracy purchases a Auto Sleeper Motorhome for £50,000
* Three years later, Tracy is involved in a motoring accident that thankfully leave her unhurt but her Motorhome is written off
* Tracy receives a settlement payment of £30,000 given that this was the market value of her Motorhome at the time it was written off or stolen
* Without any form of protect and without being forced to use any savings that Tracy may have her insurance companies settlement is the only amount that Tracy has to be able to buy another motorhome and or clear any outstanding finance.
In this example Tracy would receive a second payment from her Motorhome Gap Insurance policy for £20,000 ( she now has the full £50,000 purchase price back less the road fund licence which she can claim back from DVLA ) from this she can clear any finance if needs be and the balance of funds would be hers to spend as she wishes.
Motorhome Finance Gap Insurance is designed to protect the finance agreement you have taken out in order to purchase your Motorhome.
If in the unfortunate case your Motorhome is written off or stolen, are are responsible for any shortfall between your own insurance companies settlement and the amount that you still have outstanding on finance.
This could means that if your Motorhome is written off that as well as having no Motorhome you may have to use whatever savings you have to clear any financial shortfall or worse be left paying for a Motorhome that you no longer have.
Lets look at how finance gap insurance works and what happens how it would perform if your motor home was written off.
* Kerry takes out a five year finance agreement in order to purchase her Auto Cruise Motorhome
* It involves set monthly payments of £600
* Three years later, Kerry awakes to find that her Motorhome has been stolen
* Kerry's insurance company send her finance company a payment for the market value of her motor home on the day it was stolen but even after this there is still a shortfall outstanding of £6,195.
* In this example Kerry's Motorhome Finance Gap Insurance would send her finance company a second payment for the £6,195.