When you’re comparing GAP insurance, price is an obvious starting point. But two policies with similar names can work quite differently when you need to claim.
The best policy for you should suit your vehicle, how you paid for it and what you want to protect. Once you’ve established that, these five checks are worth making before you buy.
#1 – Check the insurer’s financial strength
You’re buying protection that you may not need for several years. Naturally, you want confidence in the insurer standing behind it.
An independent financial-strength rating gives you an assessment of an insurer’s ability to meet its obligations, including paying claims. That’s why we place importance on using financially strong, independently rated underwriters.
A rating isn’t a guarantee that an insurer cannot fail. Equally, the absence of a rating doesn’t automatically mean an insurer is financially weak. But it is useful information to consider alongside the cover and price.
Find out more about A-rated GAP insurance underwriters.
#2 – Know who stands behind your policy
The company selling you GAP insurance isn’t necessarily the insurer responsible for the cover. Look for the underwriter’s name in the policy documents, and check what protection would apply if that insurer failed.
The Financial Services Compensation Scheme (FSCS) can help, subject to its rules. Where protection applies, it generally covers 90% of valid GAP insurance claims.
However, it does not guarantee that your policy will continue. If replacement cover cannot be arranged and your policy is cancelled, compensation would normally relate to the unused insurance premium. That generally means 90% of the remaining premium, not 90% of everything you originally paid.
You could still be left without GAP insurance, at a point when arranging a replacement policy may be difficult.
Meet our GAP insurance underwriters and learn about the protection available.
#3 – Understand how your payout would be calculated
This is where a few lines in the policy wording can make a substantial difference.
Some policies use a valuation guide to decide what your vehicle should have been worth. If your motor insurer pays less than that figure, the GAP insurer may leave you to cover the difference. Some policies can also limit the purchase price they recognise for a used vehicle.
Our Invoice, Replacement and Contract Hire GAP insurance policies do not include these restrictive market-value clauses.
Top-Up GAP works differently and has its own market-value provisions. So the important question isn’t simply whether the words “market value” appear. It’s how the policy uses that value, and what that means for your payout.
Compare how our GAP insurance policies work.
#4 – Check who receives the payout
After losing your vehicle, you may want another just like it. Or your plans may have changed completely.
Check whether the policy pays a cash settlement, provides credit with a particular dealer, or requires the insurer to arrange your replacement vehicle. Those arrangements can leave you with quite different choices.
With our GAP insurance policies, any finance company with an interest in the vehicle is paid the amount due to it first, where necessary. Any remaining claim payment goes directly to you.
You don’t have to spend that remaining money with a particular dealer, or even buy another vehicle.
Read more about our cash payouts.
#5 – Check cancellation rights before you buy
Give yourself time to read the documents properly. Check both the cooling-off period and what happens if you cancel later, perhaps because you’ve sold your vehicle.
Our GAP insurance policies have a 30-day cooling-off period. If you cancel within that period, we provide a full refund, provided no claim has been made or is pending.
After 30 days, provided no claim has been made or is pending, we calculate a daily pro-rata rebate of unused premium. In plain English, that means a refund based on the cover you haven’t used. An administration fee may apply if you take that money as a refund.
Alternatively, you can put the unused premium towards a new policy from the same insurer on another vehicle without a cancellation, transfer or administration fee.
See our refund and cancellation policy.
A little time spent comparing these details can help you choose with more confidence. Always read the policy wording alongside your quotation: that’s where you’ll find the cover, limits and exclusions that apply to you.
Article last reviewed 31/08/2026