Agreed Value Gap Insurance only applies to vehicles which are older than 180 days, or have been bought privately, through a friend or an auction.
Agreed Value Gap Insurance would in the simplest of terms, protect the market value of your vehicle at the time of taking out the Gap Insurance policy.
The same principles of a typical Return to Invoice or Vehicle Replacement policy apply, for example, Gap Insurance will supplement your comprehensive insurers payment and bring you back to the original invoice price.
Agreed Value would in theory draw a ring around the current market price and prevent it from further depreciation in the future.
If in the case your vehicle is written off or stolen, you will then be returned back to this price.
The Gap Insurance provider will in most cases use the ‘Glass’s Guide Retail’ price to find your vehicles market price.
Glass’s Guide is an independent website, we recommend you to Google them and check out your vehicles current value.
Please see the following illustration which we hope will help you understand how Agreed Value can protect you and your finances.
- Mark buys a five year old Mini from his best friend
- Mark contacts an affordable online Gap Insurance provider
- Mark is informed that his Mini has a current market value of £10,000
- Mark takes out Agreed Value Gap Insurance
- Two years down the line, Mark’s Mini has been stolen through no fault of his own
- Mark receives a settlement from his comprehensive insurer of £6,000 as this was the market value of his Mini at the time it was stolen.
- Mark now has a GAP of £4,000. He is down £4,000 through no fault of his own.
- However as Mark was protected by Gap Insurance, he receives a settlement payment of this outstanding £4,000, which returns him back to the original £10,000 he paid for his Mini.
Mark will also receive £250 from his Gap Insurance policy which will go towards his comprehensive insurer’s excess payment.
To learn more about Return to Invoice Gap Insurance, please click the following link.