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Can you renew Gap insurance?


Gap Insurance is a type of insurance policy that provides financial protection, alongside your car insurance policy, in case of a total loss to your vehicle.


However, unlike motor insurance, an annual, renewable policy, Gap insurance is usually taken for multiple years. There are many types of gap insurance, but most are available for between 1 and 5 years.


With such a choice as to how long you can take Gap insurance, it is only natural to ask several questions regarding the length of cover to take—understanding if you can renew this type of cover being one of them.



Gap Insurance be renewed at the end of your current policy term?


In general, most Gap Insurance policies cannot be renewed.


This is the case for the traditional, multiyear Return to Invoice or Vehicle Replacement Gap Insurance types. These types of policies have a set coverage period, typically ranging from 1 to 5 years.


After this period, the policy will expire, and the coverage will end.


Can you take Gap Insurance at any time?         Can Gap Insurance be renewed


Most Guaranteed asset protection products are only available in a short window following the purchase or leasing of a vehicle.


So if you wanted five-year cover on a Return to Invoice basis, you would need to take a five-year policy in the first place. You could not take a three-year policy and then tag another two-year policy at the end. You would be outside the window to buy gap insurance of the same level at that time.


Lease Gap Insurance is a different type of Gap Insurance that is typically for the lifetime of the lease only. This is because the duration of the lease is predetermined, and the insurance premium is included in the lease agreement. Once the lease ends, the coverage ends, and there is no option to renew.


Gap Insurance products that can be renewed


Lease Top Up Gap insurance


The Covid global pandemic saw motor manufacturers forced to scale back new car production. The lasting impact of a shortage of microchips necessary to build a new vehicle has provided a knock-on impact on people with lease vehicles.


Traditionally, leases are provided over a set term, with the leaseholder ordering a new vehicle to coincide with the end of the current lease arrangement. However, with long lead times on new car orders, many consumers have sought to extend the lease on their current vehicle.


Some Gap insurance providers, like our sister website,  now offer a 'Top Up' one-year Lease product for people who have extended their leases. This typically requires that you have a current Lease Gap Insurance policy with the same gap insurer or provider.


The Top Up Lease Gap policy means you can protect the extended period of your lease in the same way that a standard Lease/Contract Hire Gap policy would. That means it pays the difference between the current market value settlement from the motor insurer and the outstanding finance settlement for the lease if the car is declared a total loss.


Top Up Total Loss Gap Insurance


This type of Gap insurance policy differs from most Gap Insurance products as it is an annual, renewable policy. However, it does not protect you back to the purchase price you paid, nor does it consider the cost of a replacement vehicle or outstanding loan payments.


Instead, if you were to make a Gap Insurance claim on this type of policy, it would top up the settlement from your comprehensive motor insurance policy by a fixed percentage, often with an upper cap.


For example, our sister website at Total Loss Gap offers this style of Top Up cover. In the event of a write-off, it will provide a top-up of 25% on top of the settlement from your comprehensive insurance, capped at a maximum of £10,000.


So let's say you have a Top Up Total Loss Gap policy, and your vehicle was stolen. If your motor insurance policy provided a current market value settlement of £10,000, the Top Up Total Loss Gap policy would add an extra £2,500.


This type of gap insurance cover can help if, say, you are in negative equity on your finance agreement by adding a top-up to help cover this.


Explaining Gap Insurance - Renewal and associated FAQs


Do you pay GAP insurance yearly?                            Gap Insurance Explained


Not in most cases. Return to Invoice gap insurance, Vehicle Replacement Gap cover, Lease/Contract Hire Gap Insurance and Finance Gap Insurance products are commonly multiyear purchases. That is to say that they are between 2 and 5 years in duration, and you pay a one-off premium upfront for them.


You can buy single-year products like the Top Up Lease or Top Up Total Loss Gap products on a year-by-year basis.


Will GAP insurance auto-renew?


As most Gap Insurance products cannot be renewed, it is unlikely that your Gap product will auto-renew. You should not get a renewal notice, therefore, either. Your Gap cover will simply expire at the end of your cover.


To be sure, check the terms and conditions of your existing policy with your gap provider.


How many years do you need GAP insurance?


This is a decision for you. Remember, Gap Insurance usually is only available within a set timeframe of securing or buying your vehicle. Also, whatever period you choose for cover is usually the maximum term you will have the Gap insurance cover of that type.


How many years can you have GAP insurance for?


You can find Gap Insurance products available for between 1 and 5 years. Not all providers are the same, however.


Is GAP insurance compulsory?


No, there is no legal requirement for you to take Gap Insurance on your car. Whether you take out this additional cover to run alongside the comprehensive cover provided by your car insurance company is your choice.


Can I take out GAP insurance after 12 months?


Possibly. Some Gap Insurance products, like Return to Invoice or Vehicle Replacement Gap, can be taken up to 365 days after buying your car. This can be the case with new cars where the main insurer provides a 'new for old' replacement cover in year one.


If this is the case, some Gap Insurance providers allow you to start your Gap cover at the end of year one to coincide with the end of your 'new for old' protection with your motor insurer.


It is also essential to check both the motor insurance and Gap Insurance exclusions to qualify for this type of cover.



In conclusion, Gap Insurance policies cannot generally be renewed for the traditional Return to Invoice or Vehicle Replacement Gap types, as these policies have a limited coverage period. Lease Gap Insurance is also typical for the lifetime of the lease only. However, there are alternatives to renewing Gap Insurance, such as purchasing a new policy, negotiating with the insurance provider, or switching to a different type of Gap Insurance. Understanding the limitations and options available when considering Gap Insurance coverage is essential.