Car Insurance -
Motorists advised to 'fill the GAP' - 08/02/2008
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Drivers insufficiently covered by their car insurance might find themselves out of pocket if they write their vehicle off in an accident, MB&G said yesterday.
According to the warranty provider, motorists are consistently failing to take out Guaranteed Asset Protection (GAP) or Return to Invoice Insurance on their newly-purchased vehicle.
MB&G claims that the main reason for the limited uptake of this cover is a lack of public understanding into what the products actually provide insurance for.
The policies pay out on any difference between what the driver paid for the vehicle and the insurers valuation of the car.
This could mean that people crashing their car would have any potential car insurance shortfall filled.
Such shortfalls are prevalent if the car is written off within weeks of purchase - especially if it is a high-value motor.
Operations director at MB&G Kevin Pearce commented: "We recently had a situation where a high value prestige car was written off following an accident - the shortfall between the insurance pay out and the outstanding finance was £12,000 because the car was only weeks into its finance contract.
"Because the driver had taken out GAP insurance at his franchised dealer the policy paid out and was able to buy another car without being out of pocket."
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