Gap insurance

Clum · 15 Mar 2016 at 18:01

Can someone explain to me exactly how this works in relation to buying a brand new bike? Im totally ignorant to all of this stuff as the majority of vehicles I've owned have been in Australia/New Zealand, so haven't really had to worry about insurance!

Some of you might remember my post from last August where I was knocked off my new MT-07 by a careless driver, and the bike subsequently written off. i ended up coming away from that crash with the 3rd party insurance paying out more than £1000 less than I would have needed to replace the bike :mad:

Although it was technically a fair market value that they offered, it was physically impossible to replace my bike for that amount, due to there being no similar bikes for sale at all anywhere in the country. The only way to get a like for like replacement was to buy new again, leaving me out of pocket.

As the weather is improving, I'm getting ready to put an order in for another bike. Some of you will think I'm mad, but I want to buy from new again. Is gap insurance the best way to protect myself from this sort of thing happening again?

Freelanc3r · 15 Mar 2016 at 18:17

Yes, GAP insurance is the way to go if you want to receive the full price you paid in the unfortunate case of your bike being written off.

My car got wrote off in december by no fault of my own and I was fully comp (no GAP) and received £3000 less than the car was worth, granted I bought the car 2 years prior however I still lost money so I feel your pain!

GAP insurance premiums may be a bit higher but definitely worth it if you've been stung in the past and I know i'll be doing it when I buy my first new bike.

The_Abyss · 15 Mar 2016 at 22:55

I got it when I bought my XR last year - no brainer for me. £140 or so for 3 years cover to guarantee a cash amount the same as the amount I originally paid for it.

TallPaul_S · 15 Mar 2016 at 23:52

The_Abyss said:
I got it when I bought my XR last year - no brainer for me. £140 or so for 3 years cover to guarantee a cash amount the same as the amount I originally paid for it.

God that's pennies vs the price of a new bike - just done a quick quote online for a vehicle replacement max cover £10k on a £15k bike and it's £150 for 3 years cover. Why would anyone not take this out if buying a new bike?

Clum · 16 Mar 2016 at 20:44

Thanks guys, does seem to be the way to go then. Any recommendations for a good company to use?

TallPaul_S said:
Why would anyone not take this out if buying a new bike?

Well in my case, because I wasn't aware that such a thing existed. Lesson learned.

TallPaul_S · 16 Mar 2016 at 20:55

TBH, I'd heard of it but didn't really know what it was - but then I've never bought a brand new bike before.

The_Abyss · 17 Mar 2016 at 05:36

Clum said:
Thanks guys, does seem to be the way to go then. Any recommendations for a good company to use?

I used ALA

The_Abyss · 17 Mar 2016 at 05:38

TallPaul_S said:
TBH, I'd heard of it but didn't really know what it was - but then I've never bought a brand new bike before.

It doesn't need to be used on a brand new bike. Mine was 6 months old. For me the more important point was being able to have cover to guarantee the purchase amount whilst I own it.

atpbx · 25 Mar 2016 at 10:24

Get your gap insurance from someone like Aviva rather than a dealer policy.
A dealer will want many hundreds for a policy, that will only return what you currently owe on a loan.

Aviva will do you a 3 year return to invoice cost policy for like £90 or so.

Craig321 · 25 Mar 2016 at 10:29

My bike is a year old now. So if I wrote it off, having gap insurance would mean I could go out and buy a new Speed Triple?

TallPaul_S · 25 Mar 2016 at 11:26

Yep that's how it works, I think. You'd get paid 'market value' by your insurance for your bike, which would probably be a couple of grand less than what you actually paid for it, and the gap insurance would cover the 'gap' between the insurance payout and the price you actually paid, so you're not out of pocket.

So you could buy a new one if the price was the same as you paid a year ago.

Craig321 · 25 Mar 2016 at 13:39

Hmm, going to look in to that then. If it's £100-odd for 3 years, then that is well worth it. They tried to sell it to me on the day I bought mine, but didn't really want to hear it - I was a bit tired of all the salesy stuff and just wanted to ride home

benji182 · 25 Mar 2016 at 16:28

On Aviva's website it asks what I paid but but the payout options are either £5k, £7.5k or £10k

I paid £5.5 (IIRC) so if I choose £5k I'm out of pocket £500? Or do I choose £7.5k and assume they only pay up to the £5.5k, I'm not wanting to be fraudulent in anyway and trying to get them to be paying out more than I paid for it.

The_Abyss · 26 Mar 2016 at 07:12

The insurance aims to bridge the gap between what you paid for the bike and what your normal insurance will pay out. The latter is unknown over a 3 year period so you just need to be sensible. In your case you'd select the £5,000 cover on the basis that anything more would be a waste (more than you paid).

Sin_Chase · 26 Mar 2016 at 15:08

£140 for 3 years of cover is very reasonable. Every GAP insurance policy I have ever been quoted was astronomically expensive. My ordinary insurance policy covered me for brand new within 6 months of purchase anyway, I was not about to start paying £100s a year to cover the shortfall after 6 months.

It did not make sense for the prices I was being given.

Craig321 · 26 Mar 2016 at 18:31

Been quoted £160 for 3 years here at first glance (haven't looked around much), which covers £7,500. Should be plenty on top of what insurance would give me, could probably get away with £5k cover.