Gap insurance incentive

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Tue 22 Jun 2010 15:45
Gap insurance incentive - tunacat

"How much did you pay for your car?"
"About £5800"
"When was that ?"
"2 years ago"
"It's only worth about £2300 now. But if you take out Gap insurance now, you will get a payout of a total of £5200 if the car was written-off, regardless of whose fault it was. And that's for a cost of £115. Think of it as insurance against depreciation."

Yeah, right. It's not insurance against depreciation though, is it. You only get back the original value(ish) of your car if it's totalled.
Hang on though... ...for an outlay of £115, if my car then accidentally gets torched on November 5th by an errant firework - say, -I get given £2900. Yummy!

Anybody see any drawbacks there? (!)

What I don't get is: I could understand how this seems a reasonable option to apply when you first inform your insurer about a change of vehicle, but how can the insurance industry sensibly offer to insure a car for a value near its purchase price, retrospectively, 2 years down the line?
What about if I hold off on it for a few more years and wait until my car is only worth £900, and THEN take out the insurance?

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Tue 22 Jun 2010 17:39
Gap insurance incentive - bonzo dog

Interesting. I've never come across one which allows a back-dating of the insured value to the purchase price. Can you name the company & provide a link? (If you are alowed to?)

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Tue 22 Jun 2010 19:28
Gap insurance incentive - amj

I was offered gap insurance when i bought my car new last year.

A swift punch on the nose and a polite " screw you funny man" Gave him the idea i wasnt interetsed!

They will sell you anything they can, i guess the commision is a biggie for them. I bet theres a 1001 clauses in the small print to allow them to get out of paying out.

I know a guy who had a lifetime warranty on a product. When it went wrong and he went to claim, they killed him,thereby voiding his lifetime warranty! *

Theres no such thing as a free lunch!

* this may not be entirely accurate. :-)

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Tue 22 Jun 2010 21:42
Gap insurance incentive - bonzo dog

"i guess the commision is a biggie for them"

Irrelevent - it's the risk to you which you need to outweigh against the premium; it's your money & your choice

" I bet theres a 1001 clauses in the small print to allow them to get out of paying out."

On the contrary, Gap is one of the few insurances where the get out clauses are minimal - it's pretty much a case of if your motor insurer pays out on a total loss then Gap pays. Take my word for it, you are far more likely to get screwed by the motor insurer than by the Gap insurer

Out of curiosity, why were you not interested?

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Wed 23 Jun 2010 08:55
Gap insurance incentive - LucyBC

GAP insurance makes a great deal of sense when you are putting finance on a new car, particularly a luxury model

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Wed 23 Jun 2010 14:21
Gap insurance incentive - tunacat

@ Bonzo Dog -

you seem to know a bit about this type of insurance - is it really true/normal to be able to take it out years after a purchase and be covered for near the original purchase price?!?

-sounds like a recipe for a nice scam, by those with fewer scruples (?)

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Wed 23 Jun 2010 18:22
Gap insurance incentive - bonzo dog

Hi tunacat, I've not come across it which is why I said I'd be interested to see who is offering it. I suspect it's a mistake & the company will to current value

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