GAP Insurance FAQ

What is GAP insurance?

Guaranteed Asset Protection (GAP) Insurance is a financial product separate from your regular motor insurance that is designed to protect you against financial loss.

If your car lease is stolen or written off (total loss) during your lease period, your motor insurance will normally pay the current market value of the vehicle which may not be enough to cover the finance settlement figure on your vehicle. A GAP insurance policy covers the difference between the current value of the car (the amount your car insurer will usually pay out) and the contract hire early settlement figure, including up to £2000 advance rentals.

You can find out more about GAP insurance on our GAP Insurance Explained guide.

What are the benefits of Hire and Lease GAP?

Hire and Lease GAP insurance is worth considering if:

• You’re on a contract hire or personal contract hire deal
• You paid a small initial rental for your finance deal (e.g. 20% or less)
• You’re paying the debt off slowly (e.g. over three to five years)
• You don’t have enough personal savings to pay the difference
• You’ve taken out a long-term contract hire arrangement in which you might end up owing more than the value of your car

What are the disadvantages of Hire and Lease GAP?

Hire and Lease GAP insurance is not worth considering if:

• Your motor insurance policy offers a brand new car replacement during the first 12 months of ownership (subject to restrictions or exclusions)
• You’re already covered by your finance agreement
• You can afford to make up for any shortfall
• The GAP insurance only pays out if your normal car insurance company says the car is written off (total loss) or unrecoverable

Is GAP insurance required when leasing a vehicle with Nationwide Vehicle Contracts?

Unlike comprehensive motor insurance which is compulsory, GAP insurance is an optional product and is not legally required when leasing a vehicle lease hire with Nationwide Vehicle Contracts. Whether you choose to take out a GAP insurance policy is up to you however it is worth noting that you only have a limited amount of time to take out the policy.

As with every type of finance product, it is important that fully research the benefits and considerations before taking it out to ensure it is right for you. It is also important that you pay attention to the fine print as there are exceptions to the policy.

How do I pay for the GAP policy?

You can choose to pay for the GAP insurance premium as one lump sum or by 10 monthly interest-free direct debit instalments.

If you wish to pay for the premium in full, you can pay by debit or credit card or by BACs payment.

Who is the underwriter for the GAP policy?

All of our GAP insurance policies are underwritten by Fortegra Europe Insurance Company Limited, who are authorised and regulated by the Malta Financial Services. Authority under reference no. C 84703 and subject to limited regulation by the Financial Conduct Authority under reference number 805770. 

Is my vehicle covered for GAP Insurance if I take the vehicle abroad?

Provided your lease vehicle is insured at all times under an authorised UK Motor Insurance policy which provides comprehensive cover, the GAP insurance cover extends for trips across European Economic Area.

To maintain their fully comprehensive motor insurance, customers will need to tell their motor insurance provider that they are going abroad. If you do not do this, your insurance could be invalid and this will invalidate the GAP policy.

Who regulates Gap Insurance? 

The Financial Conduct Authority (FCA). 

Is Nationwide Vehicle Contracts regulated by the FCA?

Yes, Nationwide Vehicle Contracts is authorised and regulated by the FCA in relation to consumer credit and insurance mediation activities. Our FCA firm number is 668741. 

Why do I need to wait before I can order my GAP Insurance? 

The new regulations state GAP Insurance cannot be sold until at least 2 days have passed since the compulsory information has been given to the customer. However, the customer does have the right to initiate the conversation about GAP Insurance with the firm the day after receiving the cost breakdown and policy details. 

This means that on the day after the compulsory information has been provided to the customer, if the customer initiates a discussion about the GAP contract – and states they understand and accept all the conditions – the customer is choosing to opt-out of the opt-in period.  

In the past it was quite common that the GAP payment was packaged as part of the monthly finance payment, yet now the FCA advice it needs to be clearly stated and outlined in the compulsory information documentation. They also demanded a deferred opt-in period to be implemented prior to the conclusion of the GAP agreement.   

The strict delay between selling the vehicle and selling GAP Insurance allows the customer to read the information provided by the firm, complete their own research and collect different quotes from different companies to get a better idea of the market. FCA implemented this delay in order to empower customers when making purchasing decisions about GAP Insurance, this in turn will increase the competition between GAP Insurance.  

Does the policy cover my vehicle if it is stolen?

GAP insurance covers you in the event your vehicle is stolen and not recovered, or damaged beyond economic repair provided your insurance company declare it as a total loss and offers you a settlement.

It is important to note, however that your GAP insurance policy will not cover you if your motor insurance company refuses to settle or significantly reduces the payout because of unpaid premiums, salvage value or contributory negligence. If your vehicle was stolen as a result of negligent behaviour (e.g. you left the keys in the ignition whilst de-icing or paying for fuel) and the insurance company reduces or refuses to payout, any GAP insurance will not be honoured.

Do you cover named drivers?

Yes, as long as your own motor insurance will insure them to drive your vehicle fully comprehensively then they will be covered on your GAP insurance policy.

Is the policy transferable to another vehicle?

Cover may be transferred to a family member or to a new vehicle where the vehicle  is replaced under a comprehensive motor insurer policy.

I am going to put a private plate on my vehicle, will this be a problem?

If you need to change the registration number on your policy because you have added a private plate to your vehicle, please let the Administrator know either by completing a Policy Change Request form on their website or  by writing to them at the below address:

Premia Solutions Limited, 3 Corunna Court, Corunna Road, Warwick, CV34 5HQ

Are maintenance charges covered by the Hire and Lease GAP policy?

No, the GAP policy covers your liability for the vehicle rentals only. Other costs which are not covered include:

• Road Fund Licence
• Excess mileage charges
• Late payments or arrears

Do you charge for policy amendments?

All amendments to your policy details are free of charge. If you need to change your address, highlight errors on your schedule or amend your registration number, you can amend your policy details at any time either by completing a Policy Change Request form on their website or by writing to them at the below address:

Premia Solutions Limited, 3 Corunna Court, Corunna Road, Warwick, CV34 5HQ

Please note, an administration fee is only charged for cancellations outside the 31 day cooling off period.

Can I cancel my GAP policy?

You can cancel your GAP policy at any time.

If you cancel your policy within 31 days from the start date, you will not be charged a cancellation fee and will receive a full refund of the Premium under this Policy provided no claims are known or reported.

If you cancel your policy after the first 31 days, you will be entitled to a daily pro-rata refund on the remainder of your policy based on the date the Administrator receives the letter, email or phone call minus a fixed amount of £35 to cover costs. No refund is available if any claims has been submitted.

To cancel your GAP insurance policy, please contact the Administrator via one of the following methods of cancellation, quoting your policy number (found on the Certificate of Insurance) to:

Visit: https://www.mypremia.co.uk and register as a policyholder

Telephone: 01926 622 660

Address: Premia Solutions Limited, 3 Corunna Court, Corunna Road, Warwick, CV34 5HQ

How do I make a claim?

If you need to make a claim on your GAP insurance policy, you must follow the procedure detailed in your policy documents. You will need to contact the Administrator within 30 days and before you accept an offer of settlement from your motor insurance company.

You can contact the Administrator by either:

• visiting their policyholder portal at https://www.mypremia.co.uk; 
• calling 01926 622 660

They will provide you with a claim form. You must also send the following documentation to the Administrator within 30 days of the loss for claims authorisation;

• Your motor insurance policy certificate and schedule
• The motor insurance settlement letter
• A copy of the Contract Hire agreement and the Contract Hire Early Termination Charge from the finance provider

Please send this documentation direct to the Administrator at:

Address: Premia Solutions Limited, 3 Corunna Court, Corunna Road, Warwick, CV34 5HQ

I want to complain about the sale of GAP policy, who do I contact?

If you wish to complain about the way the policy was sold to you, please follow Nationwide Vehicle Contracts Complaint Procedure.

If you wish to complain about a claim or the Administration of the policy then the complaint should be addressed to:

Customer Relations Manager, Premia Solutions Limited, 3 Corunna Court, Corunna Road, Warwick, CV34 5HQ

If the complaint is not resolved to your satisfaction, you may contact the Financial Ombudsman Service at:

Address: Financial Ombudsman Service, Exchange Tower, London, E14 9SR

Telephone: 0800 023 4 567 

Email: [email protected]