Guaranteed Asset Protection or GAP insurance covers the financial shortfall of your vehicle being declared a total loss should your comprehensive car insurance company not pay out for the full purchase price of the vehicle. You may also need GAP insurance to cover the outstanding finance payments on the car.
Cars depreciate steeply within the first three years of ownership. In the event of a total loss, your motor insurance company will not cover this depreciation, so you will need to cover this gap. GAP Insurance is especially beneficial for these first few years when depreciation is high, or the amount you owe on car finance is more than the car is currently worth.
GAP insurance policies differ from motor insurance policies. Once your GAP policy runs out, there is little benefit to renewing your policy since you may not need it or be eligible for it. On the other hand, if your circumstances change, you can transfer your GAP policy or, more simply, cancel it altogether. This article will cover ALA’s renewals, cancellations, and transfers policy. You will learn what to expect from your policy term with ALA and how this may differ from auto insurance policies.
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GAP insurance is the most beneficial in the first three years of ownership of a new/nearly new car when depreciation is the highest or the amount owed on finance is greater than the cost of the vehicle. Also, GAP insurance policies are limited to vehicles under a certain age and mileage. As a result of these two factors, it is not usually possible to renew your GAP insurance policy for the same vehicle.
Alternatively, should you buy a new car before your policy term has ended, you can use any unused premium towards GAP insurance on your new vehicle or receive a pro-rata rebate payment minus the cancellation fee of £35.
Read more about GAP insurance policy renewals here.
You are entitled to policy cancellation at any time and for any reason if you have no pending claims.
You may also wish to cancel your GAP insurance policy if:
With ALA, to cancel your policy, simply contact us to cancel your policy. If you cancel your GAP insurance policy with ALA, you may be entitled to a refund. There are two cancellation periods; the first is the cooling-off period, up to 30 days after the start of your policy. The second is the period after the first 30 days. If you cancel your policy with us within the cooling-off period, you will be entitled to a full refund. If you cancel after 30 days, you can receive a pro-rata refund based on the number of full unused days remaining for the period of insurance. You must also have had neither any successful nor pending claims made at this time.
Read more about policy cancellation with ALA.
As mentioned, GAP insurance policies cannot be renewed after the term has ended. However, current policies can be transferred under some circumstances at no extra cost. This is possible with ALA, but many GAP insurance providers do not offer or charge a fee for this service.
You will be able to transfer your GAP insurance policy in the following circumstances:
Policy transfers with ALA are generous since there is no cost to transferring your policy, aside from the difference in insurance premium. If you do not need a new GAP policy, you can cancel your policy and receive a pro-rata refund based on the unused premium.
The primary purpose of GAP insurance is to minimise any finance gap should the worst happen to your vehicle. In addition to the challenges of your car being declared a total loss, the financial stress of paying for a replacement vehicle could tip the balance. We are committed to avoiding unnecessary costs for this reason.
ALA’s average 3-year policy costs only £5 per month; your policy will only charge you for the agreed policy term, and you are free to cancel your policy whenever you wish, with generous refunds. Also, with ALA, you are not tied down to one vehicle; you have plenty of options if you want to transfer your policy onto a new car before your term ends. ALA also allows much more time to make a claim than most GAP insurance companies because we know that life can get complicated.
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