What is a Gap Insurance refund? Can you get one on your policy? If so, how much and why would you even need one?
Gap Insurance policies are just another form of insurance, and sometimes we take out an insurance policy that we have no use of anymore. Gap Insurance is a little unusual as you buy a policy for a number of years in one go, anything up to 5 years. Actually this increases the chances of you having a change or circumstance, ie swapping your vehicle, and having no use for the particular policy any more.
So what are your options? Can you transfer the policy or even get a refund?
Gap Insurance refunds
The issue of a refund on your Gap Insurance policy very much depends on the particular policy you have. The ABI released guidelines in 2011 that recommended that insurers offered refunds of unused premiums on Gap Insurance policies. Insurers are currently putting in place policy amendments that allow for this, and the likelihood is that of you buy a Gap Insurance policy in late 2012 then you will have a refund facility on the policy.
If you have bought a Gap Insurance policy up to this point, then you will need to check the policy terms and conditions to see if you have one in place.
There are also policies that will allow you to transfer unused premium onto another vehicle, and defer the start date if you have replacement cover on your own motor insurance policy.
Some providers even allow you to defer, transfer or cancel with a pro rata refund on the same policy if you wish. This gives you the best of all worlds, and if you do change your vehicle, at least you know you do not stand the risk of losing the balance of your premium, simply because you do not have the vehicle anymore.
Where to find a refundable Gap Insurance policy
Your motor dealer may do one, or some of the online retailers have them in place too. Check your policy terms and conditions , as it can make quite a difference to the cost of your Gap Insurance if you think you may need to cancel your Gap Insurance policy.