Runako

As with everything, it's not as simple as that. Firstly, not all GAP insurance policies are the same.

You really need to pay attention to the terms before signing as some don't cover certain things, like self employment.

You should also pay close attention to the wording of what exactly it covers and in what circumstances you can make a claim. For example, it does not cover repairs! It tends to kick in where there's a total loss claim.

Also, consider this. If it's an expensive bike, you may have a fairly hefty excess. You need to add this to the cost of the GAP insurance as some policies do not refund the excess in a full loss claim.

Let's say the bike cost £10k on finance and the insurance excess is £600 on a fully comp policy. The GAP costs £400 and the vehicle is valued at £9,000 after 6 months when the bike is stolen/not recovered. You pay the excess (£600) & the Insurance company will pay you £8,400. The GAP insurance will pay you £1,000 but it costs £400, so a net of £600. In total, you recover £9,000.

In real terms the only benefit to you is to cover the insurance excess. But you still don't recover the full purchase price of the bike.

Under these circumstances, it could be argued that the £400 may be better spent getting better security or other types of reduction in your insurance policy.

I'm not saying it's not worth it. Just that you should consider all the circumstances before deciding whether it is worth it over the whole period of cover. In some cases it may well work out to a great financial option when purchasing on finance (Note: Also, be wary of buying GAP on a hire purchase policy).