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GAP Insurance - Do you have to have fully comprehensive motor insurance?

 

Your motor insurance plays a crucial role in how your GAP Insurance can perform in a claim. For a successful GAP Insurance claim to be processed your main motor insurer must:


 

  • Write off the vehicle as a total loss. This can be following an accident, fire, theft or flood. 

  • Pay out the market value in settlement, instead of repairing or replacing the vehicle. 


 

To do this, then fully comprehensive motor insurance policy may be required. This is because fully comprehensive insurance provides cover for accidents (fault or non fault), fire, flood, theft etc. 

 

Standard, fully comprehensive cover also pays out the market value of the vehicle in a settlement if the motor insurer writes off the vehicle. The market value is the amount it would take to replace the equivalent vehicle from a VAT registered motor dealer forecourt. 

 

For this reason most GAP Insurance products exclude any vehicle used for motor trade purposes. Even though they may be fully comprehensive in nature, they may only cover the trade value for the vehicle, as a settlement, not the full retail value. GAP Insurance and fully comprehensive car insurance

 

What if you don’t have fully comprehensive vehicle insurance, can you not get GAP Insurance at all?

 

Motor insurance comes in different levels. 

 

  • Fully comprehensive - covers for accidents (fault or non fault), damage to other vehicles caused by you, fire and theft. 

  • Third Party, Fire and Theft - covers for damages to a third party caused by you, but not damage to your own car, fire and theft. 

  • Third Party Only - The minimum legal level of cover. Covers damages to other vehicles and people through incidents caused by you. 

 

Whilst many vehicle owners will have the protection of a fully comprehensive motor insurance what happens if you have one of the other types. 

 

The choice of providers would certainly be much smaller, but there are some GAP providers who can give more limited cover in certain circumstances. 

 

For example, if you had a motorbike and you has third party, fire and theft motor insurance cover then there are some GAP providers who can cover you. However, the only circumstances you could claim on the GAP cover would be where your own motor insurer would pay out. 

 

If you had third party, fire and theft then only fire and theft claims could be claimed on your GAP Insurance policy. 

 

If you have third party only then there are no circumstances whereby your motor insurer can make a market value settlement to you. As such you cannot use GAP Insurance in any case and any claim would be excluded. 

 

It must be stressed that not all GAP Insurance providers may allow this so it is important you check these options if you have anything different than standard fully comprehensive motor insurance in place.

 

You may also want to read: Can I claim on GAP Insurance if my main motor insurer declines my claim?

 

Written 28/6/23, written by Mark Griffiths