In 2013 there are a number of Gap Insurance providers who offer extended Vehicle Replacement Gap Insurance for up to 5 years. This means that if your vehicle is involved in an accident, stolen or in a fire that your motor insurer market value settlement can be topped up by VRI Insurance, to cover back to the replacement cost in the future.
With consumers taking advantages of more reliable vehicles with longer warranties then it does make sense to take out a longer period for Gap Insurance too. However, 5 years is a very long time so what would happen if you changed your mind and the vehicle before then?
Well in the past we have seen Gap Insurance products normally having little flexibility in terms of things like transfer and refunds.
However, the picture has changed quite dramatically in the last couple of years. Today you will find very few Vehicle Replacement products that cannot be transferred to another vehicle, but there comes a word of caution.
There are basically two ways in which your gap insurance cover can be transferred (would you believe!?). The first, and logical way, is to transfer the remaining benefits, terms and conditions of your original gap insurance policy onto your new vehicle. This is probably the way you would have expected, as the original gap insurance policy is simply taken onto the replacement car. However, some providers will allow you to use a refund, in monetary terms, of your old policy and use this towards the cost of purchasing a brand new policy. Is this really a ‘transfer’ at all?
It could be strongly argued that it is not, and of course the main issue may be that the ‘new’ policy you buy may be quite different to the old policy that you had. If the terms that you had originally have changed, then there is nothing you may be able to do about this.