Why is GAP Insurance so important?

The way we purchase vehicles has changed considerably over the past twenty years and now there are numerous options an individual or company has when choosing to purchase or lease a vehicle; which will include Hire Purchase (HP), Operating Lease, Lease Purchase, Personal Contract Purchase( PCP), Personal Contract Hire (PCH), Bank Loan or Contract Hire.

With the changes in the way vehicles are purchased there is potential increased liability to the customer and they need to be aware that some of these vehicle finance agreements have early redemption charges following a total loss claim.

A motor insurance policy usually only covers the insured vehicle's pre-accident, or theft, depreciated value.
This can be a whole lot less than its actual retail value. Take a moment to think about this. From the second the customer starts driving their vehicle its value is depreciating. So whether they paid cash or borrowed the money on a finance or lease agreement, they could be seriously out of pocket.

The introduction of regulation in January 2005 has seen a number of changes in the scheme market place as many second tier providers of insurance solutions have either lost the ability to sell insurance products or have chosen to stop offering insurance as they are not prepared to embrace regulation. Motor Dealerships, Motor Finance Brokers and Contract Hire & Leasing companies are prime examples of this.

This change means there is an excellent opportunity for Insurance Brokers to promote and market niche solutions in a number of areas to both their corporate and private clients.