Gap insurance does and don’ts

Honesty is the best policy


Gap Insurance Total Loss Burnt Car
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Whilst the enquirer who asked whether they could buy gap insurance to cover their car which had recently been burnt to a crisp and still claim was admirably honest, we had to reply, with equal honesty, that this would be fraud. 

It made us wonder why anyone would think that this was good practice (or even legal). The best we could come up with was that, maybe, the willingness of the AA and RAC to accept new annual memberships the day the car breaks down - and come to people’s rescue - has bred an idea that you can wait to buy insurance until there’s an actual incident. Just to be clear, for other kinds of insurance, this is not in fact the case.

So, a quick run through of the rules seems to be in order.

Most importantly of all, you must be insured to drive. Driving without insurance is a crime. Likewise, products like GAP insurance come with certain terms which mean you buy them in case there’s a problem, not once one actually arises. Buying gap insurance to claim retrospectively is fraud. And you wouldn’t do that would you?

Another thing you really can’t do is use the vehicle for ‘hire and reward’ which means - in plain English - not for driving as a private hire or taxi cab work, not for carrying furniture for payment or working as a pizza delivery driver. Not even for renting out your car on a peer-to-peer car rental website like HiyaCar or EasyCarClub. It’s outside the scope of the insurance and we are not set up to cover it - you’ll need commercial insurance if you’re doing any of these things.

And how will we know? We will, believe me. There are official DVLA, Hackney carriage and private hire licensing records and also this thing called Google. And if your email is ‘fred@fredsdeliveries.co.uk’ it’s not really that difficult to work out.

So don’t do it. Thanks.


by Beate Kubitz at 18 Mar 2019, 00:00 AM