GAP Insurance

It is aimed mainly at new cars and financed or leased cars. Cars lose value fast in the first years, which creates the gap. Several types exist, such as return-to-invoice and finance gap. In some countries a new-for-old clause in the main policy covers part of the same risk for the first year or two.

After a write-off or theft, the main policy pays the market value and the GAP policy pays some or all of the shortfall.

Dealer GAP policies can be expensive; standalone policies are often cheaper. Read the limits and exclusions, as cover is capped and varies by product.