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As a car driver, your sporty little number - or even your reliable run-around - is likely to be your pride and joy, and the last thing in the world you'd want to happen is for your car to be written-off.
But should you suffer that misfortune, gap insurance can ease the situation by covering the 'gap' between the insurance pay-out and the amount you initially paid for your vehicle.
MoneySupermarket has teamed up with helpucover.co.uk, a market leading provider of gap insurance, to help consumers find the most competitive car gap insurance deals and quotes available to suit their particular needs.
Here we take a closer look at gap insurance and how it works.
How exactly does car gap insurance work?
By covering the gap between the insurance pay-out and the amount of money you initially paid for the vehicle, gap insurance can cover can offer you peace of mind that you won't be left out of pocket should the worst happen.
Gap insurance is a cost-effective way in which you can protect your outlay, and offers a form of cover that you won't get with a standard comprehensive motor insurance policy.
What are the benefits of car gap insurance?
Almost any car driver will testify that one of the problems with cars, and particularly with new models, is the fact they depreciate in value so quickly.
According to helpucover, over a three-year period, a BMW 1 Series 1.8D could depreciate by 42%, while a Ford Fiesta 1.4 Zetek could depreciate by 38.7%.
This can be particularly heart-breaking if the vehicle is written off soon after purchase, as your car insurer will only pay out for value of the car at the time of the accident.
For example, say you paid £14,000 for you brand new set of wheels, this could fall in value to just half that amount over a period of just a few years. This can cause a major headache should the car be stolen or written-off in an accident, as your insurer will only pay out for the current value - in this case, just £7,000.
If you then wanted to go out and buy a car that is similar to the one you bought a few years ago, you will have no choice but to dig deep into your pockets to make up the difference.
As this example clearly demonstrates, this is where car gap insurance can prove invaluable, as it can bridge the gap between the price you paid at the outset, and the pay-out from your insurer.
In the example above, this means that, as well as getting a £7,000 settlement from your insurer for the car's current value, you would get an additional £7,000 to make up the shortfall between current value and the initial value of the vehicle.
Put simply, car gap insurance enables you to buy a replacement car which closely resembles the one you bought originally without you having to dip into your own funds.
Who is helpucover?
helpucover is a trading style of Pinnacle Insurance plc, one of the UK's leading insurers. It is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. helpucover is an established insurer with a reputation for service and reliability, giving you the peace of mind that if you take out a policy, you are well protected.
If you buy gap insurance from helpucover, this will pay the difference between your car insurer's valuation at the time your car is stolen or written off, and the car's value when you bought Car Value Protector - up to a maximum of £15,000.
Protecting you against financial loss
Car gap insurance is a cost-effective way to protect your investment, and quotes from helpucover start from just £3.06 per month. As the cover is provided directly by helpucover, the cost is cheaper than the price you would pay if you bought cover through a car dealership, as there are no showroom overheads or commission to bump up the price.
Gap insurance from helpucover covers you against financial loss from depreciation if your car is stolen or written off, and helps you get buy a replacement car which is similar in value to the one you bought originally.
Cover is available for cars up to seven years old with fewer than 80,000 miles on the clock.
Spread the cost
Another big advantage of buying car gap insurance through helpucover is that you can pay the premium in monthly instalments, spreading the cost over up to 36 months. At the end of the 36 months, you can take out cover once again, provided your car has not breached the seven-year age limit.
At this point, you will have to make a new application, and the car will need to be valued again - but this won't take long - and will then give you peace of mind that you are covered in the case of theft or write-off.
To apply for a gap insurance policy, you need to be at least 18 years old, and the named driver of the car.
Irrespective of whether you used cash, private, credit or lease purchase to buy the car, you can still apply for cover - and the application process is quick and easy.
If you're looking to get a policy, you can get a no-obligation quote in less than a minute at helpucover.co.uk