When was the first time you were offered Gap Insurance? It is unlikely it was when you renewed your motor insurance policy. When you call to get a Motor Insurance quote, you may well be offered several other products as well. Roadside cover, legal assistance even motor insurance excess cover are known to be offered to consumers in the UK today.
However, only very rarely are you ever offered Gap Insurance by your motor insurer, why is that?
Motor Insurance vs Gap Insurance
It would seem on the face of it, that motor insurance and Gap Insurance would fit hand in glove with each other. For example, Gap Insurance claims can only ever be triggered when your motor insurance company actually ‘write off’ your vehicle. So it would seem that Gap Insurance would be an obvious offering from your insurance broker, yet it is not.
The first clues into the reason is the typical duration of the policies. A motor insurance policy is an annual period, as you renew it each year. Gap Insurance can be taken year on year, but the vast majority of cover is taken for between 3 and 5 years. Indeed, the few occasions that motor insurers offer Gap Insurance is on a annual basis. However, this normally revalues the vehicle at the time you take the policy, and not the original price of the vehicle. This means you could be protecting a far lower value in 5 years times than if you had taken a 5 years return to invoice policy in the first place.
Also, Gap Insurance is quite specialist because there are actually several forms of cover, whereas motor insurance is probably a bit more straightforward. Having staff with sufficient training and expertise in the subject could be difficult and costly.
Will motor insurers offer Gap Insurance?
It is possible that motor insurers will branch out more into Gap Insurance, and you can see some signs of this with some Price Comparison websites also offering Gap Insurance to their customers. The range is still small, and it may require a leap of faith from the owners of these site to push it forward. However, you may well see a shift in stance on this in the not too distant future.
Meanwhile, there are still several specialist brokers who can offer a full range of policies to suit for Gap Insurance today.