Why do I need gap insurance?
If any problem held with cars, especially
the new ones, is that they mark down in value so fast. This can be especially
heart-breaking, as well as financially painful, if the auto is written off in
an accident.
For example, imagine you paid £20,000
for your car, which then falls in value after three years' time to just half
this, at £10,500. If your car is then stolen, or written off in an accident,
your insurance company will only pay out for the value of the car at the time,
so £10,500.
That means if you want to purchase
another car similar to the one you bought three years ago, you will have to
stump up thousands of pounds of your own money to pay for it.
This is where gap insurance can be
beneficial, as it covers protection against cars depreciation by paying the
shortfall between your motor insurer's settlement and the value of your car
today. So, as well as getting the £10,500 from your car's insurer, gap coverage
will pay out the remaining £10,500, to enable you to replace your cars with one
similar to the cars you originally bought.
Hope this will help you to understand why we need gap.
For information you
can visit these pages too ..
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