Gap Insurance

RTV and RTI Gap insurance for cars, vans and bikes

The basic concept of gap insurance is relatively straightforward - your car, van or bike is perhaps on finance, maybe on HP or a PCP and it is comprehensively insured by your own insurance company. In the event that the vehicle is written off during the term of the finance agreement, gap insurance will provide cover in the event that the vehicle's value that is paid out by your car, van or bike insurance policy is less than the amount that you owe to the finance company. Confused? Read on...

There are a couple of different types of gap insurance. One type is commonly known as 'Return to Invoice Gap Insurance or RTI gap insurance and this provides an insurance pay-out that fills the financial gap between the total loss valuation given by your vehicle's insurance company and the amount that you originally paid for the vehicle and which is shown on the original purchase invoice - hence 'return to invoice gap insurance'. If you have financed your vehicle and the finance company's settlement figure is higher than your vehicle's original purchase (i.e. invoice) price, this type of policy will also cover this.

"The finance company's settlement figure was significantly higher than the value placed on my car by my insurance company. Without gap insurance, I'd have been left with a real shortfall that I would have needed to fund myself"

'Return to Value Gap Insurance' or RTV gap insurance is similar but provides an insurance pay-out that covers the financial gap between your insurer's write-off settlement and the amount owed to your finance company - this is aimed mostly at those who have financed their car, van or bike through hire purchase, a PCP agreement or through a contract hire agreement.

Finally, 'Vehicle Replacement Gap Insurance' is exactly that - insurers will pay out an amount that will enable you to purchase a vehicle similar to the one that has been written off, even if the replacement vehicle is now more expensive than the original.