clinchy993 said:
My policy is a variation from this, a "combined vehicle replacement policy". Under this arrangement, the insurer will reimburse the financial shortfall between the settlement from the main Insurance provider and the price of the equivalent new vehicle (up to the claim limit set out in the policy). In therory, it provides slightly better protection than RTI as it will fill in a shortfall created by subsequent increases in the price of the new car.
For example, say the car is purchased for £65k new. A four year gap policy is purchased with a maximum claim value of £50k.
Four years later, the car is written off and the Insurance company settles at £28k. In the meantime, the price of the car has risen to £72k. In this case, the gap insurer will settle at £44k. In this case, a conventional RTI would pay out less than this (£37k). This policy was slightly more expensive than the equivalent RTI but, at only £299 for the four years, I was very satisfied. I hope that I never have to claim on it, however.
I should stress that the price was for covering the BMW, not the Porsche (this may well make a difference, not sure).
