Yes, and I wanted to double check that I was correct so I actually phoned the gap insurer a moment ago and spoke to them. It works like this:
In the event of your vehicle being declared a Total Loss (written off) through
accident,
fire,
theft, or
flood, Replacement GAP insurance aims to pay the difference between your Motor Insurance payout and
THE GREATER OF either:
- The amount (if any) outstanding on finance at the time of claim EXCLUDING any Negative Equity brought forward from a previous vehicle (unless the optional "Negative Equity Cover" was purchased), OR
- The ORIGINAL PURCHASE PRICE that you paid for your vehicle first time around, OR
- The cost of REPLACING YOUR VEHICLE with one of the same Make, Model, Age, Specification and Mileage (or nearest equivalent) as your original vehicle was when you first bought it - even if the replacement vehicle cost is MORE than you bought the vehicle for first time around.
So, it's the third bullet point. I questioned that in my case I would be entitled to an 18 month old M5 Comp Pack despite the fact that would be a new model now and that it would be priced at around £30k more than what I'd paid for my M5 last year, and he confirmed this would indeed be the case. The only caveat he highlighted was that the gap insurer wouldn't actually go out and source a car for me, deal with BMW and buy it on my behalf, but provide the funds as a cash sum.
Win!