Do I need Top-Up GAP insurance?
GAP insurance is an entirely optional form of insurance and some people will have a greater need for it than others.
Without GAP insurance in force, if your car is written off, you'd only have your motor insurer's valuation of the vehicle coming your way. If you have finance outstanding on your written-off vehicle, your motor insurer's valuation of the vehicle may not be sufficient to clear the outstanding balance, in which case, you'd have to use your own funds to both clear the remaining finance on the written off vehicle and fund a replacement vehicle.
Of course if you had no finance outstanding at the time of write-off, then in theory you could use your motor insurer's valuation of the vehicle to buy a vehicle of a similar age, condition and mileage as your vehicle at the time it was written off but, if you wanted anything newer or better etc, you'd have to use some of your own funds to cover the difference.
Top-Up GAP insurance would aim to top-up your motor insurance pay-out by up to 25% and includes cover for up to £250 of any excess deducted by your motor insurer. If you have finance outstanding this additional money could come in useful by either contributing more towards clearing the finance than you would otherwise have been able to pay without it, or, by leaving you with more funds to go towards the cost of your next vehicle.
In short... if you can comfortably afford to stand the combined cost of clearing any finance outstanding (where applicable) and replacing your vehicle in the event it's written off, you probably don't need GAP insurance. However if you could not comfortably afford this or, you'd prefer that your own savings were not 'hit' by the cost of replacing your vehicle if it was written off, therein lies the need for Top-Up GAP insurance.