Gap Insurance is a policy that runs alongside you own motor insurance and protects you financially if your Van is written off.
Please remember that your own motor insurance company is only ever legally bound to offer you the value of your van on the day it is written off and with the average van losing up to 50% and possibly more depending upon usage and mileage, any settlement you are given can and often is thousands and thousands of pounds less than you originally paid.
Also that without any form of protection what ever your own insurance company offer you in settlement and without using any savings you have is the only amount that you would have to be able to replace your van and or clear any outstanding finance.
Depending upon the level of van Gap Insurance you elect to buy you can protect the difference between your vans valuation on the day it was written off and the amount needed to return you to the original invoice price, or the amount outstanding on finance or even the inflationary increased replacement cost.
Gap Insurance is just like any other insurance in that it is all about the risk and how something happening would effect you. Van Gap Insurance therefore protects you the only way it can by protecting you financially.
Van Vehicle Replacement insurance is the latest form of protection available this is because instead of protecting just a physical amount for example the amount that you still have outstanding on finance or the invoice price you are protecting the future replacement cost.
Don't forget that over time just as your van is depreciating in value the cost of another van the same age mileage, specification and condition as yours was on the day that you collected is increasing. VAT, labour rates, raw materials, and model upgrades can mean that even if your van was not written off and you wanted to replace it in a couple of years time the chances are that the price will have increased.
This is exactly where Vehicle Replacement Insurance can help as vehicle replacement to some extent ignores the price that you originally paid for your van and instead looks at replacement costs.
For example you buy a van and pay £15,600 & Vat.
Three and a half years later your van is written off the exact circumstances do not matter except to say that your own insurance company are happy to settle. They offer you the market value of your van which at the time with nearly 90,000 mileage on the clock is £5200 & Vat.
Most Gap Insurance policies would simply protect any amount you have outstanding on finance or perhaps the invoice price of £15,600 & vat. But what about model changes, what about inflationary increases? Unfortunately simply getting the full purchase price back is no guarantee to be able to buy another van on a like for like basis as yours was on the day that you drove it home from your dealership.
Therefore, Vehicle Replacement Insurance would top your own motor insurance companies settlement back to the replacement cost. In this example lets say £17,000 & vat. You now have the full replacement cost back. You can clear any finance if needs be and the balance of funds, the deposit you originally paid, the equity that you generated while you where making your payments and any inflationary increase is yours to do with as you see fit.
(Please remember that if you have claimed the VAT element of the cost of your Van back then any settlement will be less vat.)
Our Van Gap Insurance polices have many features and do not have any mileage restrictions except on the day that you buy the policy, how many miles you do after this time is exactly up to you. Also as buying and locating vans is not our field of expertise so in all cases you will be paid the cash equivalent. You may want the same van but you may not and at Shortfall we feel that it is really important that you decide where, when and most importantly on what you hard earned money is spent.
Return to Invoice Gap Insurance is most likely the level of Gap Insurance that you will have been offered by your van dealership or Internet broker.
Return to Invoice Gap Insurance is a very clinical and easy level of cover to understand. This is because you already know how much you have paid for your van and should it be written off. This is in essence between your two insurance companies this is the amount that you will be return to.
Briefly your own insurance company will pay you the value of your van on the day it was written off. (don't forget that if you have claimed the VAT element of the vans price back any settlement will be less VAT). Your gap insurance policy then tops this value back up to the original invoice price you paid.
You now have the full purchase price back. From this you can clear any outstanding finance if necessary and the remaining amount is yours to do with as you wish.
Please remember that while we are very proud of our Van Gap Insurance policy and features, all insurance policies, including our Return to Invoice policy will have terms and conditions and that it is really important that you read your policy before you buy.
For example, our policies do not have a market value clause what so ever, we cover all factory fitted options and up to £1500 worth of dealer fitted options as well as paying towards your own motor insurance excess, however, the cost of your road tax is excluded as you can claim it back from DVLA.
Did you know that if your contract hire van is written off during your contract that your contract hire company are within their right to claim up to 100% of all outstanding rentals.
They may call it something different, settlements, advance rentals, back rentals it really makes no difference as they are in fact one and the same, in that it is a physical financial amount that you will have to pay over and above your own motor insurance companies settlement.
Finance and Contract Gap Insurance can help as it very simply designed to make sure that you can walk away with no further financial liability. (excludes late payment charges and arrears). Simply put, it pays the difference between your vans valuation and the amount outstanding on finance.
Van Finance Gap Insurance is a very basic and easy to understand level of protection.
But to understand what Van Gap Insurance is and how it works you first need to understand and accept two basic but fundamental and harsh facts of life
If your van is stolen or involved in an accident and written off your own insurance company are only obliged to offer you their value of your van on the day it was written off.
Your van will lose value over time. Depending upon the mileage that you do and what you use your van for it can lose over 50% of its original value in less than three years.
So, what does this really mean for you?
In brief, it means that if your van is written off you will depending upon how much deposit you have originally paid be left in the position of your own insurance companies settlement not being large enough to clear any outstanding finance.
Without any form of Gap Insurance you are legally responsible for any financial shortfall. Yes you could use your savings and yes you could take out a bank loan to pay any shortfall but why?
Finance Gap Insurance is designed to pay the difference between your van's valuation on the day it is written off any simply clear your outstanding finance. (this excludes any late payment charges or arrears)
While our Finance Gap Insurance policies have some very special terms and conditions, for example, a no market value clause what so ever they can not and will not stop your van from being stolen. They certainly can not stop your van from being involved in an accident. However, Finance Gap Insurance can make sure that if you do join the estimated 600,000 other UK vehicle owners whose vehicles are written off each year in the UK alone that at least the financial worry is taken away.