Gap Insurance as you may already know is a form of supplementary insurance that runs alongside your own fully comprehensive motor insurance.
It comes into force when your vehicle is written off and pays the shortfall that is created when your own insurance company pays the market value on the day of loss. To know about rv rentals san diego visit https://rvfunrental.com/rv-rental-prices-in-san-diego/
Gap insurance has come along way since its first versions as a form of finance gap and contract hire insurance. Logically evolving into a form of return to invoice gap insurance. This allowed cash and finance buyers to protect not just the outstanding finance but instead the invoice price they paid.
There was however one big problem with standard forms.
Costs increase over time. Transportation, manufacturing costs, labor costs, variations in rates of value-added tax means that over any extended periods of time the cost of a new vehicle increases.
For illustration purposes lets say that you bought a Volkswagen Golf GTI in 2007 and paid just over 20,000. Four and a half years later your Volkswagen skids on black ice.
Thankfully your Golf performs impeccably and absorbs the impact allowing you and your passengers to walk away with nothing more than minor cuts and bruises. The amount of damage your Golf sustains however leaves no option for your insurance company to write it off.
Vehicle replacement insurance allows you to protect your self against the difference between your vehicles valuation on the day of loss and the amount of money you would need to spend to buy another vehicle the same age mileage and conditions as yours was one the day you drove it home from the garage, even if the price has gone up.
It could almost be described as a form of return to invoice with an inflation-proof aspect.