GAP Claim examples

Purchase Price Protection GAP - Example:

Jane's vehicle was hit in the rear by another vehicle and because the damage to the vehicle was extensive her motor insurer wrote the car off and paid market value:

Vehicle: Peugeot 308

Vehicle purchased for: 18,325

Date of accident: July 2014 (18 months after purchasing the vehicle)

Motor insurers market value payout: 8,410

The GAP policy paid Jane: 9,915 (the difference between the amount Jane received from the motor insurer and the amount Jane originally paid for the vehicle).

Combined Purchase Price Protection & Finance GAP - Example:

Lucy's span off the road during icy conditions. Because the damage to the vehicle was extensive her motor insurer wrote the car off and paid market value:

Vehicle: Ford Fiesta

Vehicle purchased for: 6,500

Date of accident: January 2015 (4 months after purchasing the vehicle)

Amount outstanding on Finance: 6,830

Motor insurers market value payout: 5,700

The GAP policy paid Jane: 800 (the difference between the amount Jane received from the motor insurer and the amount Jane originally paid for the vehicle) plus it paid an additional 330 to clear the outstanding finance. Total GAP payment 1,100.

Lease GAP - Example:

The following customer had Lease GAP as he acquired his vehicle on a 3 year Personal Contract Hire agreement. Michaels vehicle was stolen and not recovered by the policy so his motor insurer declared the vehicle a total loss and paid market value. The problem that can occur is that the termination charges applied by leasing companies can result in being higher than the motor insurers market value settlement, as experienced by Michael:

Vehicle: Mercedes SLK

Termination charge from leasing company: 21,655

Date of accident: July 2014 (25 months after purchasing the vehicle)

Motor insurers market value payout: 18,745

The GAP policy paid Michael: 3,160 (the difference between the amount he received from the motor insurer and the termination charge from the leasing company).

Total Loss Top Up - Example:

Stephen left his vehicle overnight at his local garage awaiting its service the following day. Overnight the garage was involved in an Arson attack and Stephen's vehicle caught fire and was destroyed and subsequently written off by the motor insurer.

Vehicle: VW Golf GT

Vehicle purchased for: 18,000

Date of fire: January 2016 (2 years after Stephen had purchased the Golf)

Motor Insurers market value payout: 12,000

Total Loss Top Up paid Stephen an additional, 3,000 (25% increase on the 12,000 that was paid by the motor insurer)