GAP insurance covers you if you irreparably damage your motor vehicle and your car insurance coverage doesn’t pay enough to settle any outstanding lending on it or the price of replacing it.
GAP stands for Guaranteed Asset Protection. There are various sorts of this insurance to choose from. They generally cover the gap in the amount your car insurance company pays out if the car is write-off compared with what you still owe on any loans or finance or the amount you have to pay to replace the car.
GAP insurance is becoming increasingly popular due to the high depreciation costs on cars and their falling resale prices.
Return to Invoice GAP insurance (RTI Gap Insurance). You can buy RTI GAP insurance for cars less than seven years old. However it can only be obtained within three months of buying the car. It repays the difference between your car insurance claim settlement total and the amount you bought the car for, the invoice amount for the car.
Return to Value GAP insurance (RTC Gap). You can buy RTV Gap insurance for cars less than 7 years old, but more than three months old. It repays the difference between your car insurance claim settlement and the value of your car at the time you took arranged the policy.
Finance GAP insurance. You can purchase Finance GAP insurance for cars bought on finance, using a finance deal such as hire purchase or lease purchase. It pays the difference between your car insurance claim settlement amount and the amount owing on your loan or finance agreement. This means the payout could be more than that from RTI GAP insurance. For extra comfort you can get combined RTI and Finance GAP cover so you would secure the largest amount of money applicable.
Replacement GAP insurance. You can buy replacement GAP insurance to insure the cost of replacing your car with the same make and model as you originally bought. This can only be purchased for new or ex demo cars that are less than three months old and this insurance has to be arranged within ninety days of buying the car.
Now that you know what gap insurance is, click on this link for additional facts and figures about gap insurance.
Brenda Jones on March 19th 2010 in Car Insurance
Car insurance is a legal requirement in the UK so driving without the required levels of cover is actually a criminal offence that can result in imprisonment for serious cases. So with car insurance being compulsory, what factors should you be looking at when you are trying to find the best value policy?
Insurers treat age as one of the major factors when pricing their policies. Males between 17 na d25 have proved to be the most likely to make claims and so are charged the most by their insurance companies. On the other hand, a lady in her 50′s is seen as a much lower risk and would therefore find car insurance is cheaper for her.
The amount of cover that you receive under the terms of your policy also determines the cost of your car insurance. Comprehensive insurance is the most expensive but does provide cover for you car and all third parties involved in a claim, minus any excess payments due. Third party cover is generally the cheapest but does not pay out for damage that your vehicle, but only to third parties, as the name suggests.
When you get a car insurance quote, the premium or the cost of the insurance will vary from company to company. This is because each company will base their quote on a set of risk factors and increase or decrease the premium depending on how your rate against these factors.
This might sound complex but actually insurance is all about balancing risk with profit so when you apply for a policy with an insurer, they are looking at the chances of you making a claim and then pricing their policies against that risk.
Common risk factors used by car insurance companies include details about the vehicle type such as the number of doors and seats. The engine size is also important as more powerful engines are more costly to insure due to their faster acceleration and top speeds. More powerful engines also generally contain more expensive parts should any repairs have to be made under insurance cover.
The annual mileage that you travel in the car is also important to declare when buying insurance as the more miles that you travel, the greater the risk of an accident. You may have a collectors car that you only use on Sundays and therefore travel less than 2,000 miles a year in it so arranging a low annual mileage policy is likely to save you money.
Click this link to find out more about motor insurance and the information insurance companies want.
Brenda Jones on March 14th 2010 in Car Insurance