What is gap insurance?

mind the gap


Could it be an insurance policy, to insure your iconic GAP hoodie from the 90’s?

Could it be an insurance policy, that covers you if you don’t mind the gap, getting on to the Tube in London?

Both valid guesses, as you can insure almost anything these days, even body parts, please visit my other website http://www.insuremytoe.co.uk I’m just kidding.

To understand what gap insurance is, we first must understand what our car insurance means, by saying, “if stolen or written off we will only pay market value”.

So, let’s say you buy a new car for £20,000 and you insure the car for the same value. Six months later, the car gets written off in an accident. The market value of that car is now £15,000 (as new cars lose lots of value), the insurance company is going to pay you out £15,000, not the £20,000 the car is insured for.

Now, this is where gap insurance is handy, gap insurance bridges the gap from market value, to what you paid for it. So, In the scenario above, you don’t lose £5,000.

Gap insurance can run up to three years of cover, so let’s use the same scenario as above, but instead of the car being written off at six months, let’s say two years. The cars “market value is now £10,000”, your car insurance pays you out £10,000 and gap bridges the £10,000 difference, to pay you out £20,000 in total, exactly what you paid for it two years ago.

Gap insurance is good value for money, a three-year policy, depending on the value of your vehicle, would cost from £100 – £400 for the three years of cover.

Like all insurance, gap is a “what if product”, you may never need it, but personally speaking if I was to buy a new car, I would buy it.

Gap insurance can also be purchased for used vehicles, but seeming as used cars don’t devalue as fast as new cars, it’s up to you if you see the value in the cover.

Let’s say you buy a used car that was £4,000 and in three years’ time it will be worth £2,000, the bridging gap will be £2,000. Do you see the value in gap for £2,000 worth of cover? If yes then buy it, but if no don’t, this all depends on, if this is value to you.

Worst deprecating cars in the UK 2018

These cars would even make a dent in Bill Gate’s wallet.

  • Renault ZOE I -Dynamique Quick Charge (it’s hideous) Costs new £29,020. Depreciation year 1. £21,770 (75%) year 2. £22,854 (78.7%) year 3. £23,920 (82.4%). So, in the first year it loses almost £22,000 of its value, after year 3 it loses 82.4% of its value! Instead of buying gap insurance, just don’t buy one in the first place.

renault Zoe

  • No surprise this manufacture is on the list, Alfa Romeo Mito 1.3 JTM costs new £15,980, Depreciation year 1, £10,655 (66.7%) year 2 £11,605 (72.6%) year 3 £12,480 (78.1%)


alfa romoe mito

  • Why someone would drive one of these out of choice is a mystery, Fiat Doblo 1.6 multijet 120 active. Costs new £24,487 Depreciation year 1 £15,737 (64.3%) year 2 £17,637 (72.0%) year 3 £18,937 (77.3%)



Please not this deprecation is based on 12,000 miles a year.

So, with how bad depreciation car be, you can see the value in Gap insurance, you can also see why they have hundreds of fake claims each year, of people writing their cars off on purpose. Probably all ZOE owners.