Insurance; it’s something none of us really want to pay for, an annoyance rather than something we are compelled to purchase. We’ve all felt that sinking feeling when we get a quote for a policy that costs almost as much as the car itself. Comparison sites have changed the insurance game slightly and have, in effect put the consumer in control, now we have the power at our fingertips to analyze the market in a matter of minutes. Despite this many of us still won’t be singing from the rooftops about our policy prices.

Recent rulings by the European court of justice have really shaken up the insurance game, equalizing the gender gap, this means that men will end up paying less for their policies, while women’s premiums will rise as they make up the deficit. Despite this, the fact remains that the insurers are still the winners, and they will be for as long as car insurance is a legal requirement. You may not be aware however that there are optional types of car insurances, policies independent to that of your main method of cover.

These optional insurance policies are often brought into play when financing a car using methods like hire purchase or contract hire. I personally took out a contract hire plan with my local dealer and was very much coaxed into paying for a gap insurance policy. So what is gap insurance? Essentially gap insurance covers your vehicle for a set period of time, typically two to three years, and means that if the car is written off during that time, it be will replaced with a vehicle of equal value.

Now, I hear many of crying out that after shelling out a huge deposit, as well as insurance and road tax would we want to pay another few hundred for something intangible and unquantifiable? I was eventually swayed after learning that, should I write off my vehicle, which to be fair wasn’t outside the realms of possibility considering that it was my first vaguely powerful motor, I’d have to continue with the monthly payments AND the seven thousand pound final payment!

Of course the aim is not to wrap my new pride and joy around a tree at the next available opportunity, but gap insurance gives you that piece of mind that, should the worst happen, you are covered. In the end, it’s all a game of calculated risk.

 

 

Joe is an insurance specialist who would recommend taking out gap insurance plans on lease hire cars. You can find him on Twitter @joe__johnson__

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