Should I have GAP insurance if I am only third party insured?

There are so many different types of car insurance it can be difficult to decide which level of cover is the right one for you. Guaranteed Asset Protection Insurance or GAP insurance can be a good extra insurance to have, especially when purchasing a new car but can you have it when you have third party insurance? 

The short answer to this is no.

When you take out a third party insurance policy you are ensuring that any injury caused to another person or any damage caused to their vehicle or property is covered by your insurance, however damage to your own vehicle is not covered.

The type of insurance cover you need for GAP insurance 

To be able to take out GAP insurance you must have the highest level of car insurance known as comprehensive

Comprehensive insurance covers you for – 

  • Damage to another person’s vehicle or property 
  • Injury to another person 
  • Damage to your own vehicle
  • Injury to yourself or your passengers 
  • Fire
  • Theft
  • Malicious damage
  • Accidental damage
  • Chips & scratches. 

After an accident your comprehensive insurance company will send an assessor to assess the damage to your car. If it is repairable then they will deal with the claim.

However if they deem the car to be a write off they will pay you the current market value of the car. Your GAP insurance would then make up the shortfall between the amount that you purchased the car for and the current market value.

GAP insurance is especially beneficial if you have purchased a brand new car which will depreciate quickly in the first three years. 

Why can I not have GAP insurance with third party cover?

When you take out a third party insurance policy you are ensuring that any injury caused to another person or any damage caused to their vehicle or property is covered by your insurance, however damage to your own vehicle is not covered. Therefore you will be responsible for paying for any repairs that are needed to your car.

If your car is written off you will not receive any payments from your insurance company, therefore you would not be able to claim against GAP insurance

How do I decide which level of cover is right for me?

This all depends on your expectations in the aftermath of an accident resulting in damage to your car.

If you know that you would not want your car to be repaired and you are in a position to purchase a new car then third party insurance may be right for you. This is a popular choice among people who own older cars. 

However if you are purchasing a newer car that you plan to keep for many years then the chances are that if it was damaged or stolen you would want it to either be repaired or replaced. In this scenario the highest level of cover would be beneficial.

You may take out comprehensive insurance without having GAP insurance, although for brand new car owners the two together is a popular choice to ensure that you are not left out of pocket, should your car be written off or deemed unrecoverable after being stolen. 

How do I obtain GAP Insurance?

You may be offered this by the dealership when purchasing your car although it is advisable to shop around as quotes will vary in price between different insurance companies.

There are many price comparison websites or you can contact different insurers directly where they will be able to talk you through exactly what your policy covers you for and how much this would cost you.

Many policies are for three years although you may be able to take out a second GAP insurance policy after three years depending on the age of your car. 

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