GAP(Guaranteed Asset Protection) insurance is an optional, add-on car insurance coverage that can help certain drivers cover the “gap” between the amount they owe on their car and the car's actual cash value (ACV) in the event of an accident.
For example, if you crash and write off your new car a year after buying it, your insurer will only pay out its current value. This is likely to be much less than the amount you paid.
Gap insurance can also cover any money you still owe if you bought your car on finance and your car insurance pay out is not enough to repay it. Most policies last for up to four or five years, or until you make a claim.
Types of GAP Insurance Policy
What is excluded from GAP Insurance?
Gap insurance may not cover you in certain situations, so it is important you understand what is excluded from the policy before you buy. Common exclusions include: