It pays to talk

Why calling us before you buy gap insurance helps avoid expensive mistakes


FA336D7F-620C-4DA0-A873-4AE2C631D983
Next Post

Sometimes it really pays to call us before you buy a gap insurance policy rather than doing everything online. Why? Because we listen to our customers and make sure that the policy lines up for them - and if we can’t insure you in your circumstances or you need to check anything before taking out the policy we will tell you. It’s no good slipping up on the paperwork and getting to a situation where you’re making a claim only to find that you’ve accidentally done something to invalidate your insurance. 

Everyone thinks they’ve read enough to understand what they are buying - and we do try to make things simple - but there are some basic rules to insurance that we have to adhere to.

Finance Gap Insurance covers your finance agreement so technically it is about insuring the financial interest in your vehicle. It might seem obvious but we do sometimes see instances where a parent has bought a car for their son or daughter. That’s quite straightforward if it’s a cash purchase, but if the parent used finance to buy the car, the gap insurance has to cover their financial interest. If you call us to arrange gap cover, we can check that you’re doing it right and that the gap insurance, registered keeper and V5 all line up.

Unfortunately we’ve seen cases where this isn’t the case. If a parent takes out finance for the vehicle and is the registered keeper named in the V5 - but the driver aka grateful child takes out and pays for the gap insurance they are only covering their own ‘financial interest’ in the car i.e. their obligations in relation to the finance agreement. Which are precisely zero. The finance company dealt with the parent and the child doesn’t exist as far as the finance agreement is concerned. So the policy doesn’t line up - it’s not valid and there’s nothing we can do in the event of a loss.

To be absolutely clear, for Finance and Contract Hire Gap Insurance the person liable for the finance MUST be the person who takes out the gap insurance. In this case the parent.

Please, please phone us if you’re in any doubt. We don’t want to be in the unfortunate position where we can’t pay out.


By Beate Kubitz at 8 Apr 2019, 00:00 AM