When your car or van is written off, either through damage or theft, you will normally receive a payout from your standard insurer. But what happens if that payout is not enough to buy a replacement car? You could be left footing the bill for the difference.
GAP insurance is designed to prevent you losing out financially if your vehicle is written off. It will pay out the difference between what you originally paid for the vehicle and what the payout from your standard insurer is. Some GAP insurance policies can provide the funds you need to buy a car to the same specification as your old one, even if the price has increased.
One vehicle is now written off every minute in the UK which equates to over half a million cars every year.
A vehicle is considered a write off when the insurers believe there is no economic sense in carrying out repairs.
If you damage your car you claim on your insurance but the majority of insurers will only pay out up to the value of the vehicle immediately before the damage occurred. This can leave you with a gaping hole in your finances – between the amount the insurers pay out and the cost of buying a new car.
A report published by the Financial Conduct Authority in 2024 highlighted that insurers needed to give good reasons for valuing a vehicle below market price as evidence had shown that customers had been granted settlement figures lower than may have been expected.
Of the over 562,000 vehicles that were written off in 2024 there are likely to be many people who were left with a costly surprise. You can avoid being one of them.
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