GAP insurance commonly concerns a shortfall between a vehicle-related insurance settlement and an amount defined by a finance or replacement arrangement. The particular product may use a narrower calculation than the full outstanding debt.
The distinction that matters
A financed vehicle being written off does not itself establish a GAP entitlement. The base motor claim, loan balance, fees, arrears and policy exclusions need separate examination.
What to check
- The definition of an eligible total loss.
- How the shortfall is calculated.
- Excluded loan amounts and benefit caps.
- Optional status, cancellation and financed premium costs.
Example to discuss
Ask the provider to calculate a hypothetical write-off using the actual loan and motor-policy assumptions, including any excluded arrears or charges.
This is a hypothetical comparison, not a customer claim or a determination of cover.
Sources and further reading
General information only. The policy, schedule and applicable rules determine the actual position. For a personal decision, use an appropriately qualified adviser or the relevant provider.