Does GAP insurance cover accidental damage?

We all know that if you have comprehensive insurance then accidental damage to your car is covered but what about GAP Insurance? Is accidental damage covered? In what circumstances will your GAP insurance pay out? 

Let’s first look at what GAP insurance is and why you might need it. GAP stands for Guaranteed Asset Protection and is mostly used by drivers who are purchasing a brand new car. New cars depreciate rapidly in their first three years and can quickly lose up to 60% of their value. If you are in an accident within those first three years and your insurance company deems your car to be a write off then they will pay you the amount that your vehicle is currently valued at. The end result being that you will receive a lot less money that you originally purchased the car for.

However when you have a separate GAP insurance policy, they will pay you the difference between the purchase price and the current market value. 

If your car is damaged either through having an accident or some form of accidental damage and is repairable this will have to be dealt with by your insurance company.

In what scenarios will you be able to claim against your GAP insurance?

There are two scenarios in which you can claim against your GAP insurance

  • Once your car has been written off after an accident. 
  • If your car has been deemed unrecoverable after being stolen.

In both cases your car insurance company will have to deem the car as either a write off or unrecoverable before you can then claim on your GAP insurance, although you must talk to your GAP insurance advisor before accepting a settlement from your insurance company.

What if the accident was my fault? Will my GAP insurance still pay out? 

There are two types of accidents – At fault and No fault.

In both cases, whether the accident was your fault or another drivers fault, your GAP insurance will still pay out providing –

  • Your car is written off,
  • You have informed them within their stipulated time frame,
  • You inform them of the proposed settlement from your insurance company. 

What if my car is damaged through either in an accident or accidental damage?

If your car is damaged either through having an accident or some form of accidental damage and is repairable this will have to be dealt with by your insurance company.

They will initially send an assessor out to assess the damage. If it is repairable they will give you a list of approved garages where you can have the repairs carried out and your insurance will cover this minus your compulsory and voluntary excess charges.

Only in cases where an assessor writes your car off can you then claim on your GAP insurance. If repairs are thought to be more than the current value of the car the assessor will write your car off.

Points to note about GAP insurance –  

  • GAP insurance has the most amount of benefit when purchasing a brand new car as this is when the most amount of value is lost. Many insurers will not cover a car that is over the age of seven years old. 
  • You may only take out GAP insurance if you have comprehensive insurance. Those with third party cover cannot have GAP insurance. This is because third party insurance only covers damage to another person’s vehicle or property. 
  • GAP insurance will not cover modifications you have made to your car such as alloy wheels and spoilers. 
  • If your car is less than 12 months old then your comprehensive insurance should automatically replace your car so GAP insurance may be an added expense that is not needed. 

If you decide that GAP insurance is right for you then be sure to obtain prices from several different insurance companies for the best deal. You can also speak to the dealership where you are purchasing your car as many do offer this insurance although it may be more expensive. 

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