In this day and age of high premiums and modest coverage, you might be pondering whether it would be smart to buy gaps insurance to cover the gaps left open by your car insurance policy. Gap insurance will make a difference in the event you run into circumstances not covered by your car policy. This article is going to discuss strategies to consider for saving time shopping. It will also present information on how to save money and at the same time buy quality coverage.
As soon as you drive your car off the forecourt, it drops approximately 20% of its’ value through depreciation and if it is a new car the depreciation is even steeper. Gap insurance can help you protect the financial investment you have just made. You might have heard the term “Return to Invoice Gap”. If you buy Gap insurance you would have another payment besides your motor insurers payout if something should be in an accident, have your car vandalised or stolen.
You have a choice of how much Gap cover you buy. If you have sufficient cover the two payouts you would receive in the event of a serious situation might make it possible for you to be able to purchase a new car.
A person buys Gap cover to protect the financial investment they have in their car. Buying Return to Invoice Gap protection means you will receive a high enough pay-out from both your motor and Gap covers to be able to purchase another car at the same price as the car that was involved in the accident or stolen.
Another term – Return to Value Gap refers to cover that will allow you to receive enough pay-out from both your motor and Gap covers to equal the value of your car.
An important feature of Return to Value Gap cover is you can purchase it any time up to seven years from the date of your purchase of your car. This kind of cover will also be affective regardless of whether the car was purchased through a dealer or a private owner, if cash was used in the purchase, if a loan was assumed and/or if the car is contract hire or leased.
You may wonder why you would buy Gap insurance rather than increase your comprehensive motor insurance. The answer is that many times people find they lose money when their car is stolen or written off after an accident. Often what happens after and accident I the insurance company will write off your car which makes it possible for them to make a settlement based on the current book value and not the original price of the car or even the balance you still owe.
If you have Gap – Return to Invoice – insurances you will get two payouts. One of the payouts will come from your motor car insurance carrier and the other from the Gap carrier. The Gap settlement will be paid to you directly and will not go through your other insurance.
There are many companies offering gap insurance so it is best to look around for the cheapest policy with the coverage you want. A brilliant way to begin to collect information about Gap coverage is to look at the Standards and Poors and AM Best ratings given by major insurance rating services. This will be convenient for narrowing down your search for credible companies.
Also be sure to investigate discount insurance brokers. They typically provide the best quote for a Gap policy because they do not take a commission.
Another suggestion is not to purchase more Gap insurance than you need. This may seem obvious but, sometimes there are assertive brokers who want to sell you the whole enchilada.
All in all, it seems that purchasing Gap insurance is a good investment in the future. You never know what is going to happen but having a plan and a Gap insurance policy in your back pocket is a good way to save for that potential rainy day.