Gap Insurance can be used to cover a number of different requirements. The basis of this type of insurance is that your vehicle is likely to lose value over a period of time. If it is involved in an accident or stolen, and subsequently 'written off' by your insurance company, you are likley to only receive the market value at that time. You would be faced with having to replace the vehicle, and could raise a number of issues for you.

What if you have finance outstanding on the vehicle? The insurance settlement may not be adequate to pay this off. Even if you do not have a finance agreement on the vehicle, you may only receive an insurance settlement for a vehicle valued at the time it was written off. This could be thousands short of the original price you paid. If you want a vehicle equivalent to the one you originally bought, even the original invoice price may not be enough to cover this, as inflation can effect the cost vehicles like anything else.

Gap can help provide protection against all these eventualities. This means should the unexpected happen, you are not left with financial burden and no vehicle as well.