If your vehicle is the subject of a Contract Hire/ Lease Agreement and is declared a complete write-off through accident, fire, theft or flood, then your insurer will pay out what they think your vehicle is worth at that time.
what is Gap Insurance?
Contract Hire Gap Insurance will pay the difference between the motor insurers write off settlement and what is needed to repay the lender or leasing company to end the agreement. This protection provides motorists with an opportunity to protect against the potential for financial shortfall.
Who Can Take Out Gap Insurance?
It is available to motorists who have a dealer, broker or leasing company arranged Hire Purchase, Lease Purchase, PCP, Lease and Contract Hire plan.
Do I need Contract Hire Gap Insurance?
If you are operating a vehicle under a Contract Hire agreement, it’s well worth reading the terms and conditions of your agreement to understand what is required of you in the event of a write-off.
In most cases, you will be required to provide fully comprehensive insurance for the period of the arrangement and pay all outstanding rentals due, plus VAT from the date of the write-off. This could leave you with a significant bill. Having Contract Hire Gap Insurance will ensure that you can walk away with no financial liability.
Gap Insurance can be hugely expensive so always shop around for the best price