5 Common Misconceptions of GAP Insurance
Car insurance can sometimes feel like a minefield; finding the right level of cover for your needs can cause much confusion. As a result, many people simply take out basic ‘fully comprehensive' car insurance, and assume that they are adequately protected. However, it is vital to understand the full extent of your insurance provision to ensure you are sufficiently covered should the worst happen.
‘It Won't Happen to Me!'
It is easy to be complacent when it comes to your car insurance. Perhaps you have never had to make an insurance claim, and perhaps you never will! However, if you did lose your car due to theft or write-off, would the financial and emotional pressures be worth the complacency? Take the time to understand your insurance needs to give yourself complete peace-of-mind and financial security.
GAP Insurance in an example of a lesser-known type of car insurance that is surrounded by confusion and misunderstanding. But what is it?
As soon as your brand new car is driven off the garage forecourt, it loses a significant proportion of its original value; after three years the average car sees depreciation of 60%. Should your car be stolen or written off, GAP (Guaranteed Asset Protection) acts to protect the owner from losing out financially due to depreciation.
Taking out GAP Insurance can represent a very prudent financial decision. However, it is still the subject of much misunderstanding and confusion.
5 GAP Insurance Myths:
1) It is Only Available from Your Main Dealer
Contrary to popular belief, GAP insurance doesn't have to be purchased from your car dealer; it is often available to purchase at a much cheaper price from alternative sources including online insurance providers.
2) I Won't be Covered if My Car is Stolen
GAP insurance usually covers vehicle theft. However, your cover may be invalidated if you have been negligent with the security of your car. Check the terms and conditions with your provider.
3) It's Only Needed if I Have Finance on my Car
Although GAP Insurance is most frequently taken out alongside a vehicle finance agreement, it can also be used by those who purchase their vehicle outright. In each instance, GAP insurance can prove to be of great value.
4) You Don't Need GAP Insurance on a Brand New Car
Some people think that when buying a brand new car it is are automatically covered up to the original value for the first 12 months. However, this isn't always the case.
When considering any type of insurance it is crucial to avoid making assumptions - always check the finer details.
5) There is Only One Level of Cover Available
There are five main levels of GAP insurance available, depending on your requirements:
- Return to Invoice
- Vehicle Replacement
- Return to Value
Looking After Your Pride and Joy
Ultimately, when you purchase a new vehicle you want to keep it safe. From extending your BMW's warranty to locking it up at night, it is important to give yourself the peace of mind that your new pride and joy is both financially and physically protected.
Have you ever suffered a significant financial loss due to an inadequate level of insurance cover?