Gap insurance

[coordinated]

Our dealer offered us "gap" insurance for £450 (to protect us from the difference the insurers would pay out versus the actual retail cost if the Cali was written off in its first 3 years). It's underwritten by VW UK.

As this was right at the end of the handover, and the first time he'd mentioned it, we said we'd have a think about it.

Comfort have confirmed that they cover the retail price for the first two years, so we'd be paying £450 to insure our insurance(!) for a single year.

Does anyone think this is worthwhile, and have you taken it out?

Thanks,
Steve

 

[Californiaman]

It would probably be worse than you think if you double up on the insurance as the insurers would have to then enter into a (probably lengthy) discussion about who is liable!

 

[Ben2012]

Ok going to say I work for an insurance company. I do not own a VW ( wish I did ) but I saw this post and thought i would answer it.

Gap insurance as you know is used to protect the shortfall created when your own insurance company only pay the market value.

E.g you Vw is written off and it is valued at £25,000. You had paid £45000. This leaves a shortfall of £20,000.

Depending upon the level you chose you can protect either any financial shortfall- finance gap. The invoice price you paid - return to invoice. Or the replacement cost - vehicle replacement.

If you are lucky enough to have an insurance company who offer's new for old within a 1 or 2 year period fantastic. But what happens after then? If you try to protect your VW after this period you can not protect the invoice or replacement cost. Instead as you have owned your VW for over 180 you can only protect the valuation of it on the day you buy the policy. Naturally this can be a big difference.

The world of gap insurance responds to what customers want i.e demand. You can find deferred gap insurance policies which allows you to pre date the start date for up to 12 months. ( sorry as far as I know no-one offers two years deferred)

There are however points to look for when considering a policy esp for a Camper
Is the purchase price limited?
Are all factory options covered?
Are the number of days you spend abroad limited?

Do you research and make informed choices. Really hope this helps

 

[Bjohnson]

I had this on a brand new vw scirocco I bought a couple of years ago, didn't see I had much choice in the unlikely event car was written off.....but.......

I feel that it is another insurance 'con' personally, that is designed to extract yet more of my hard earned cash from my wallet and further justify the generally poor service and extreme reluctance to pay out from insurance companies in the event you actually have to make a claim.

Why don't insurance companies do what they are supposed to do and what you are 'supposedly' paying them to do I.e. insure the specific vehicle that you have paid an insurance premium against?

It's not as if insurance is cheap. Insurance companies require very specific information - where the vehicle is stored, parked overnight, expected miles per annum, personal details of all drivers and prompt payment of premiums - so why is it we now have to pay 2 premiums and still battle just to get get a replacement or reimbursement in the event of a claim?

Sorry, rant over

 

[John]

Great Rant

I totally agree bet if your Cali is stolen you will only get the book price which is totally unrealistic and way below the actual market value for a used Cali. :x

Why should you have to top this loss up with gap insurance.

John

 

[GeoffB]

The day after our deposit was receipted and the paperwork all signed up, someone from the finance dept of our Cali supplier was on the phone offering us gap insurance for 3 years at £430 (and we won't even be getting her for over a month). Our first thought was that it was another scam to screw more cash out of us, but on reading the stuff they sent we'll probably go for it - it's 'only' £143 a year. A pity the insurance business is so shifty that you need additional insurance, but that's big business for you. :headwall

 

[Bjohnson]

As mentioned already, I had it on my new scirocco and my wife has it on her mini convertible; i'm just fundamentally opposed to it even though i have paid it and clearly understand what it is providing!

Why cant my selected insurer charge me £110 extra per year and provide a proper insurance service and sufficient cover for the vehicle in question? Instead of providing me with a half arsed insurance policy that then has to be topped up with another insurane policy :censor

To my mind insurance is a form of legal extortion :headwall

Heres another example from personal experience.......

A couple of years ago an idiot reversed their car into mine whilst it was parked in B&Q car park - I was in the store at the time and completely oblivious. I was fortunate that someone in the car park witnessed the incident and took a note of the vehicle details, driver etc.

I passed all this to my insurer and they pursued my 'claim'. Despite having a full eye witness account, the third party continually denied the accident and it took my insurance company 12 months to reach a conclusion, part of which required my witness to provide a detailed description of the offending driver!

The end result - I got my excess refunded, no claim bonus intact.

Great, or so you would believe.......fast forward 12 months and the insurance on my motorbike is due. Call my insurance company for a new quote and asked if I have any claims in the last 5 years....."yes" says I, "but it was against my car policy, I wasnt in the vehicle at the time of the incident and my insurers made a full recovery from the third party"

Now my motorbike insurance has gone up by £100 per year Why? Well apparently due to the accident above I am now a "higher risk driver" :crazy

This makes me so angry, but in an unusual way, offloading my troubles here seems to have an unusual calming effect..... :clap

 

[John]

Another great rant :evil:

Again I can relate to this as I was hit on the school run by a provisional driver who pulled out with out looking.

The provisional driver admitted liability, I got my VW Touran repaired, and my no claims was still intact all was well.

Actually no as my insurance cost have now increased as when you have a accident even if it was not your fault and you are not liable statistically you are more liable to have another accident. :headwall

Great this insurance game I need to start a new career. :roll:

This online ranting does work I feel so much better now. :evil: :x

John

 

[Julie&Ron]

I have taken out Gap insurance for a pre-registered (12) Berghaus. The policy is through ala.co.uk and is vehicle replacement cover for three years. I insured for the full list price with a maximum benefit of £25,000 (gap) at a cost of a single payment of £238.00. There were other cheaper policies available on the net.

Ron

 

[Anonymous]

Just reading up about this, having been offered it in the past.
I thought that it was to pay off any outstanding finance which is remaining after you have been paid out, as opposed to being a second lump sum to top up your pay out to cover the gap to the purchase price of anew one - but that might just be the products I have been offered.

I have just checked and found out that Comfort's motorhome insurance does give a New for Old cover for vehicles up to two years old and less than 12,000 miles.

 

[BikerBoy]

I thought the principal purpose of gap insurance was for finance purposes. I.e. the outstanding debt is higher than the market value of the vehicle.

My understanding is that Your insurance company should cover be covering the cost of an equivalent vehicl in the event of write off, not just the theoretical value in some price guide. My friend had a very direct experience of this...car written off and offered derisory sum by insurance company as determined by price guide. He went back argued the market rate for replacement was higher and got approval for £5k more, which was close to double the original offer. He did have to offer proof, i.e. see Autotrader, but it was straightforward and insurance company should be commended for acting with substance. No doubt my friend won't be changing insurance company.

The price guides cannot be perfect and my recent attempts showed Glasses were off (both ways) materially on over 50% of the vehicle models I looked at. I am afraid CAP is even worse, particularly on anything based around VW transporters.

Clearly "New for Old" is a different deal and something that would be factored into the cost of your insurance. It's obviously an anomaly in the car market that Cali's used prices are so strong and that "young" ones are not far from new car prices.

I am sure we would all be interested to here a view from an insurance company or somebody who works for one.

 

[GeoffB]

Don't think it's to cover finance - we're in the fortunate position of not needing any thanks to a legacy, but have still been offered gap insurance by the Cali supplier. From what we can see in the documentation it's to cover the shortfall between the cost of buying a new replacement and what the insurance company will give you if you write your Cali off. We'll probably go for it when we pay for ours next month.

 

[Bjohnson]

My understanding - and hence ranting - was its to cover the shortfall between what the insurance company pay and what the vehicle costs to replace, not to cover finance shortfalls although I guess you could use it to a off any finance outstanding on a 'lost' vehicle, although I expect that would get even more complicated!!!

 

[BikerBoy]

Here's a definition of GAP insurance.


"GAP insurance covers the excess amount on your loan in an instance where your insurance company does not cover the entire loan. Depending on the companies specific policies it might or might not cover the deductible as well. This coverage is marketed for those who put low down payments, have high interest rates on their loans, and those with 60 month or longer terms. GAP insurance is typically offered by your finance company when you first purchase your vehicle. Most auto insurance companies offer this coverage to consumers as well. If you are unsure if GAP coverage had been purchased, you should check your vehicle lease or purchase documentation."

I don't mean any offence, but ordinary insurance should be covering he cost of replacement in case of a write off. Thats what its there for. From my perpsective we should not be having to use a top up unless you are looking for new for old cover or are worried about depreciation against finance. Clearly those borrowing heavily need to think about gap insurance given the severe depreciation on most new vehicles these days.

 

[BerndRos]

Spot on, that's what GAP was originally meant for.

But, as we all know insurance companies are more roguish than the punters they so like to whine about. If you keep your vehicle in good shape and with low miles, your unlikely to get a suitable replacement with the payout in the event of a write off.

 

[GeoffB]

From the Financiers at Manchester Commercials, yesterday:

"Retail Price Protection covers the cost between your original invoice price and an insurance payout following a total loss. Insurers, as a rule, will only pay the current market value of a vehicle at the time of a write off or total loss. This would be significantly less than the original invoice price as depreciation and age are factored in.

There are policies available to cover people who have financed their vehicle, these are generally known as finance GAP. What we offer is Retail Price Protection GAP which we recommend, irrespective of how the vehicle is funded".

Can't help agreeing that this wouldn't be necessary if the insurers didn't use creative accounting to get the most out of their customers while paying the barest minimum when they actually make a claim. A couple of hundred years ago they'd probably have been strung up at Tyburn, but now sadly daylight robbery is legal when done by companies rather than individual highwaymen. :evil: