GAP insurance

[7755matt]

I've not long bought a brand new bike (sorry - not an SV).

It cost more than all the other vehicles I've ever owned put together probably so now I'm bricking it that if anything goes wrong am I covered. Obviously it's fully gobo insurance, but talking to people they mentioned GAP insurance.

I bought it on the Kawasaki black and white finance deal - £100 deposit and the rest over x number of years

Should I tags out GAP?

Has anyone else taken it?

Which company and which sort of insurance?

Thank uou

[chirpy999]

Hi, this Gap insurance is used by car dealersto mug you out of more money. I was sold it when I bought my last car, I seem to remeber that if the vehcle was wrote off and the insurance wwas going to pay book value the gap insurance would pay the difference between book value an d what you bought the car for.

If youve bought on finance and not been offered it its probably not very popular in the bike trade.

If you have fully comp insurance you need no more I wouldn't of thought just ride and enjoy it, IMO you would be better off spending the extra cash on security like a huge chain and chain it up to a solid object.

[yokohama]

My understanding is it covers the gap between a new bike list price and market value. For example, if the bike is stolen or trashed (riders fault) after a couple of months, the insurance will only pay what they think is the value of the bike after depreciation so in effect, if the bike cost 10k and the insurance say it's worth 8k, the owner is a couple of grand out of pocket. However, if the Gap costs £300 say, is the cost worth the likelihood of the loss??
As usual, you takes the choice and pays yer money.
On the other hand, Gap normally lasts 3 years so if the bike is trashed after 2 years 11 months, you basically get the full money for a new like for like replacement.
If I'm wrong, I'm sure one of the insurance experts will be along shortly ...

[ethariel]

What I'v read is that it covers the difference between the insurance offer and the Invoiced price, it's not a like for like replacement (which is good if you have a whole raft of addons purchased when you bought the bike)

[r0ddy]

I had gap insurance on my last gsxr, when it got nicked it covered the shortfall between the remainder of the borrowed amount and the insurance valuation. Was worth it I think.

[kaivalagi]

I got gap insurance for my new tiger explorer, I got is separately from my main insurance and finance deal, cost me about £60 for 3 years I think and covers a £5K difference between standard insurance pay out and the price I paid, worth it I think

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).

[Red ones]

That's a neat example.

You could of course insure against paying the excess. In which case you would insure against a £600 cost and the premium would be much less.

I have always been careful to ensure the finance depreciates faster than the bike, ie deposit needs to be significant and the term needs to be reasonably short.

Works most of the time. The current bike got knocked over and almost written off after a month. Doh.