Protect yourself against financial shortfall with Fleet GAP Insurance

As more businesses use lease or contract hire agreements to finance vehicles, we look at an uninsured risk that’s often overlooked.

Motor vehicle values are depreciating as soon as ownership is taken and so there can quickly be a gap between the motor insurer’s settlement figure and the amount owed to the finance or lease company in the event of a total loss of a vehicle.

Fleet insurers valuations take no consideration of the amount of money left owing on a vehicle and so Fleet GAP Insurance provides reassurance that in the event of a total loss you are protected.

What is Fleet GAP Insurance?

GAP insurance (Guaranteed Asset Protection) is an insurance policy that is designed to cover the difference between the amount owed on a vehicle and its actual value in the event of an accident.

In the event of a total loss, Fleet GAP Insurance pays the outstanding amount owing to the finance or lease company, or 25% of the motor insurers total loss settlement figure up to the maximum indemnity limit whichever is the greater.

For example, after a total loss, the insurance pays out £28,500, however, the termination charge from the Leasing company is £31,614.82. This leaves a financial shortfall of £3,114.82. We pay the greater of the outstanding finance/lease or 25% of the motor insurer’s settlement. In this instance, we pay 25% of £28,500 = £7125.

Do I need it?

Fleet GAP Insurance comes into its own if a vehicle from your fleet is stolen or written off. But there are other factors to consider.

Business owners may believe they are prepared if an individual vehicle is involved in a collision, but what if your entire fleet is wiped out in a fire, flood or act of vandalism?

Should such an incident occur the investment could be costly; firstly covering the cost of payments to the hire/lease company and secondly; the cost of purchasing replacement vehicles to keep the business going.

What does a policy include?

Most comprehensive polices include the following:

• Temporary replacement car or van
• Cover for all company vehicles not just those on lease or finance
• Flexibility to add vehicles at any point
• Cover for director/personal vehicles insured under the motor fleet
• Cover for cars and commercial vehicles up to 44 tonnes

How we can help you

We have a dedicated team of experts and can tailor policies for you no what matter what mix of cars, vans or other vehicles you operate.

We aim to evolve our commercial customers’ offerings and make sure you are covered for every outcome.

Contact us and tell us about your specific requirements and we can get a policy in place now.