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Can I claim on GAP Insurance if my main motor insurer declines my claim? 

 

In short, no. 

 

A GAP Insurance claim relies on two things:

 

  1. your primary fully comprehensive motor insurer writing the vehicle off following a fire, theft, flood or accident and 

  2. paying out the market value in a settlement. 

 

Should your motor insurer decline the claim on your motor insurance, then they have not written the vehicle off. With no write-off declaration, you cannot ask for a GAP Insurance policy to pay for any shortfall. 

 

What if the motor insurer declares the vehicle a write off but does not pay out the full market value?

 

This could happen when a motor insurer deducts an amount, or a percentage, from your market value settlement due to your negligence or the condition of the vehicle. 

 

For example, your motor insurer may reduce your settlement if you fail to declare all your points on your driving licence and are in an accident that sees the vehicle written off. 

 

This is because you have not revealed all the material facts to the insurer. If they had known about your further points, they may have charged you more for your annual premium or indeed declined to cover you at all.  

 

Let us say, in this example, that the vehicle is written off and has a market value of £15,000. Your motor insurer could say they will declare the vehicle a write-off but deduct 20% from your settlement. In this case, that would be £3,000 from the £15,000 figure. 

 

What would happen with your GAP Insurance claim?       car insurance fire theft flood accident

 

In this case, the vehicle has been written off, and the motor insurer has made a settlement, although not for the full market value. 

 

GAP Insurance is not designed to cover any penalties that see your motor insurers' market value settlement reduced due to negligence. In this case, the £3,000 that the motor insurer has deducted would not be covered due to the contributory negligence of the policyholder. 

 

The GAP Insurance should, instead, pay any shortfall calculation from the £15,000 it would have expected the motor insurer to pay out in the settlement. 

 

For example, lets say you bought the car for £25,000 and have a Return to Invoice GAP on the vehicle. 

 

The vehicle is in an accident and your motor insurer writes the vehicle off. 

 

The motor insurer reduces their market value settlement from £15,000 to £12,000 because you have not declared 6 points on your driving licence. 

 

The GAP Insurance provider will provide you with a settlement based on the difference between the original invoice price paid and the market value your motor insurer would have paid, before they deducted a value for your negligence. 

 

Therefore the RTI GAP settlement would be for £25,000 - £15,000, so £10,000 in total. 

 

You receive £12,000 from the motor insurer. 

 

This leaves you with £22,000 in total. 

 

For more details on GAP Insurance exclusions, please visit our dedicated page that features the Top 50 GAP Insurance exclusions.



Written 27/6/23, written by Mark Griffiths