Gap Insurance is one of the least known cover options available for both new and used cars. Simply put, the purpose of Gap Insurance is to cover the difference in the cost you paid for your vehicle, and the amount you would be paid out if you had a claim where the vehicle was written off/if it was stolen and never recovered.
Interestingly the name “GAP” doesn’t actually refer to the “gap” in value of what you paid vs. what you can claim back; it stands for Guaranteed Asset Protection.
When you make a claim following an accident or theft, the amount you will be paid out for your vehicle is dependent on it’s market value at the time of the claim. This will not be the amount you paid for it. This can result in the unfortunate situation where you are unable to purchase a replacement vehicle equivalent to the one involved in the claim.
An example of GAP
A simple example would be the scenario where you purchase a brand new car for £25,000 and 18 months later it is written off in an accident. An insurance company would not pay out the £25,000 to replace the vehicle. It would pay out the value the vehicle was worth when the claim occurred, likely closer to £12,000. New vehicles depreciate in value very quickly over the first couple of years following their purchase.
If your car is on finance, GAP cover is often compulsory. This is because whilst you owe the dealership repayments toward the vehicle, you do not technically own it. In the event of a default they could reclaim the vehicle from you. The vehicle they reclaim must be equivalent to the vehicle you had on finance. Alternatively, you may be left paying back the finance for the full value of the original vehicle, despite driving a much less valuable replacement vehicle that you purchased with the insurance payout following the claim.
Taxi GAP Insurance is a common purchase for Taxi Drivers looking to protect their livelihood. As a Taxi Driver you require a vehicle that allows you to carry out your work and provide a source of income. A GAP Insurance policy offers peace of mind in ensuring you will be able to purchase a like-for-like replacement Taxi in the event of a serious collision or vehicle theft where your original vehicle is written off, or never recovered.
Connect Insurance are able to compare GAP Insurance for Taxi Drivers to help you find the cover you require. GAP Insurance quotes can be expensive and many providers take advantage of Taxi Drivers knowing they rely on the protection it affords. We are able to arrange Private Hire Taxi GAP Insurance or even GAP Insurance on a Lease Taxi.
Many Taxi Drivers worry about how much GAP Insurance costs; here at Connect we will compare GAP Insurance Quotes on your behalf and help you find the most suitable GAP Insurance policy.
In this article:
1) How much does gap insurance cost for taxi drivers?
Taxi gap insurance costs as little as £208 for an insurance policy which provides you with 3 years cover. We are able to provide instant quotes and compare different insurers for you.
2) What does taxi gap insurance cover?
It is designed to pay you the difference between the amount you had paid for your taxi and the amount your taxi insurance will pay to you after declaring the vehicle is a total loss.
3) Is gap insurance more for a taxi than a car?
Yes taxi gap insurance does cost more than a car due to the vehicle being used as a taxi.
4) How does taxi gap insurance work?
Providing you have just purchased the taxi vehicle from a VAT registered dealership or internet broker, you can take out a taxi gap insurance policy which covers you for either 12, 24 or 36 months. The value of your vehicle must be less than £50,000 and will cover private hire taxis.
5) Do you need gap insurance if you have comprehensive taxi insurance?
Yes you would still need gap insurance as your taxi insurance would only pay you the market value of the vehicle. The taxi gap insurance would then pay you the difference to return you to the original vehicle invoice amount.
PLEASE BE AWARE THAT NOT ALL MENTIONED COVER, FEATURES AND BENEFITS ARE PROVIDED AS STANDARD. SOME MAY BE SUBJECT TO ADDITIONAL PREMIUM. OTHERS MAY BE SUBJECT TO UNDERWRITERS TERMS AND CONDITIONS. IF YOU REQUIRE ANY SPECIFIC COVER, FEATURE OR BENEFIT ON YOUR POLICY, PLEASE ADVISE DURING QUOTING. YOU MUST ENSURE THAT THE COVER IS INCLUDED PRIOR TO ACCEPTING THE INSURANCE CONTRACT. CONNECT INSURANCE BROKERS LTD ACCEPT NO LIABILITY SHOULD YOU REQUIRE A FEATURE OF COVER DURING THE POLICY DURATION THAT HAS BEEN OMITTED AS A RESULT OF YOUR FAILURE TO SPECIFY IT’S NECESSITY PRIOR TO INCEPTION. PLEASE BE AWARE THAT CONNECT INSURANCE LTD CANNOT GUARANTEE THE SOLVENCY OF ANY INSURER WE USE.