Gap Insurance

[Gismo]

Didn't want to reply on one of the sponsor's threads, but, do you have Gap insurance?
Nobody has ever been able to explain to me why we pay insurance for our cars that don't actually cover the cost of it if it's written off in an accident :ragin:
Why can't we just buy Gap Insurance and no actual car insurance :rolleyes:

If you figure that a new MINI will cost in the region of £20k, insurance is around £250 (average price) but then throw in Gap insurance for £100 (average price) I just feel we are being conned :computer:

[Angib]

Isn't it intended for those buying almost entirely on credit so after a short while the secondhand value (and hence any insurance payout) is less then the outstanding finance?

But it does strike me as a product for suckers - let's say average payout is £5,000 and that total loss occurs on 1 in 500 insured cars, so that means it's average value to the insured person is £5,000/500 = £10.

But I guess if someone's whole income is tied up in paying for credit or insurance, they won't mind paying ten times as much as a policy is worth.....

[AndyP & Lenore]

Lenore and I are lucky (or maybe daft) enough to not bother with GAP insurance but here's my take on the two different types.

I guess it does give some reassurance to those who are credited up to the limit and if they did write their car off in an incident, the GAP insurance would jump in and cover the difference between what the original insurance covers and what is outstanding on the finance agreement.

Those who pay a chunk down in the first place and only finance maybe 60% or 70% of the car would maybe benefit from RTI (return to invoice) insurance, which again makes up the shortfall between what the insurance pays out and the original invoice amount for the car.

But I agree with you fully Alan, we pay for car insurance and that should be all that's required when a car is damaged beyond repair.

[Gismo]

When you take out car insurance, required by law, the insurer almost never replaces the car like for like, which, essentially is what the insurance is for. They even take into consideration depreciation, which i agree with, but, if you ever get into that situation i can't ever recall anyone getting a "fair" replacement when their car was totalled.
I agree it gives peace of mind for folks paying off loans, but, the insurer should burden the responsibility.

[Big Col]

Couldn't agree more with this. I remember when one of my first cars was written off 'cos a dumplin drove into the back of me whilst on a run to test their new brakes (fail!). The insurer told me that the settlement was based on the value I would get if selling the car. Took a considerable amount of restraint not to swear as I pointed out that I'd be wanting to BUY a bloomin' car not sell it so surely that was what they would cover! Ridiculous.:argh:

[zimbo]

Thats Insurance companies for you :ragin: Screw you over when looking to get insurance and then do it again if your unfortunate enough to need to claim from them as well :frown::moonie:

It is ridiculous!!