How Important Is a Gap Insurance Claim Limit?
You may not know it but your gap insurance claim limit is almost as important as the type of cover that you chose or even the policy features terms and conditions.
Not every supplier will explain this to you. Sometimes this could be because in the case of most main dealerships they simply have maximum limits and sometimes it could be something a little less innocent.
So what is a claim limit?
A gap insurance or shortfall protection limit is the maximum amount that you will ever be paid from your gap insurance policy. No matter which type of policy, no matter how long you have cover for. Yes it is an amount on top of your own motor insurance companies valuation however an unsuitable shortfall limit can cause major issues.
For example if you have just bought a vehicle for 25000 and wisely protected yourself against any financial loss with a four vehicle vehicle replacement policy. Should you need to make a claim towards the end of the life span of your policy you will need a claim limit that is big enough to be able to pay the difference between your vehicles valuation and the amount that you would need to spend to buy another vehicle the same age, mileage and condition as yours was on the day it was written off.
If the average vehicle vehicle looses up to 50 5 within a three year period and even with a marginal inflationary increase we hope you will agree that a claim limit of just 5,000 would be classed as unsuitable.
At Aequitas Automotive Limited we have been concerned that not all customers are being all the information they need in order to be able to understand their claim limit and the implications of an unsuitable level of protection.
Ar first glance when you start to compare levels of cover it can be easy to shave off a couple of pounds by simply lowering the limit. This however is false economy.
A growing number of customers we speak to are completely unaware of what a claim limit is and the ramifications and this has implications for the whole gap insurance market.
So in summary if you are comparing levels of protection please remember that the claim limit is almost as important as the policy terms and conditions and that it is too late to come to the conclusion that your claim limit was not big enough to be able to perform when your vehicle has been written off.
Not every supplier will explain this to you. Sometimes this could be because in the case of most main dealerships they simply have maximum limits and sometimes it could be something a little less innocent.
So what is a claim limit?
A gap insurance or shortfall protection limit is the maximum amount that you will ever be paid from your gap insurance policy. No matter which type of policy, no matter how long you have cover for. Yes it is an amount on top of your own motor insurance companies valuation however an unsuitable shortfall limit can cause major issues.
For example if you have just bought a vehicle for 25000 and wisely protected yourself against any financial loss with a four vehicle vehicle replacement policy. Should you need to make a claim towards the end of the life span of your policy you will need a claim limit that is big enough to be able to pay the difference between your vehicles valuation and the amount that you would need to spend to buy another vehicle the same age, mileage and condition as yours was on the day it was written off.
If the average vehicle vehicle looses up to 50 5 within a three year period and even with a marginal inflationary increase we hope you will agree that a claim limit of just 5,000 would be classed as unsuitable.
At Aequitas Automotive Limited we have been concerned that not all customers are being all the information they need in order to be able to understand their claim limit and the implications of an unsuitable level of protection.
Ar first glance when you start to compare levels of cover it can be easy to shave off a couple of pounds by simply lowering the limit. This however is false economy.
A growing number of customers we speak to are completely unaware of what a claim limit is and the ramifications and this has implications for the whole gap insurance market.
So in summary if you are comparing levels of protection please remember that the claim limit is almost as important as the policy terms and conditions and that it is too late to come to the conclusion that your claim limit was not big enough to be able to perform when your vehicle has been written off.
Source...