GAP insurance explained: what it is and why it matters

Most people don’t realise how quickly a car loses value — and what that means when your insurer settles a total loss claim.

Understanding the financial gap

If a vehicle is written off or stolen, an insurer’s settlement may reflect its current market value. That can be different from the amount you originally paid or the balance remaining on a finance agreement.

What to check in the policy

Check how the cover is calculated, any eligibility period, the claims process and exclusions. Make sure you understand how it works alongside your motor insurance and any finance agreement.