Return to Value (RTV) is a special type of GAP Insurance, which is applicable for the cards owned for more than 3 months’ time, but not beyond 7 years. The RTV GAP insurance can be availed if you have paid in cash, took a loan, or did a contract hire lease agreement.
RTV GAP can offer you an added protection. If you have paid for the car using a bank finance or loan or if you leased it by paying in cash, RTV GAP Insurance offer protection against the value of your vehicle if in case your primary car insurance company declares a total loss in case of irreversible damage or the vehicle being stolen.
Reclaiming the value of your car
Once if you care is getting declared as total loss due to accident, theft, or vandalism, then the insurer is bound to pay just the loss value and for this they will assess the actual current value of your vehicle after depreciation. Once if this is calculated, you will surely be at a significant loss with an additional burden to pay off a higher amount to the bank or financier.
If this happens, Return to Value GAP insurance can pay you the depreciation, which is deducted by the primary insurer and effectively level the discrepancy between the car’s actual current value and what you have to pay to the financier based on the purchase value of your car.
The providers of RTV guaranteed asset protection may also be conducting an independent third party valuation also to have an accurate and impartial assessment. If in case of a stolen car, the fact is that most of those are never recovered. There are hundreds of thousands of such cases become a total loss every year. The other major factors which make RTV GAP unavoidable are;
• Majority of the insurers just settle the depreciated value of the car, not the actual purchase value.
• Cars depreciate each day and the drop in its value can be about 35% in the very first year itself.
• A standard car may loss about 60% of its actual value in the first three years’ period itself.
• The owner needs to pay the deprecation, which is not the insurance provider’s liability.
In case of stolen and not recovered, the insurer may settle the claim as total loss. If the car is vandalised or involved in an accident, if the repair costs may be most of the times greater than the actual value of the car or if cannot be repaired, it will be written off. In whatever condition you car is, in case of such write offs, the amount settled will be only what it is worth today.
In UK, the standard GAP insurance covers the cars up to;
• 80,000 miles during inception
• Minimum £50,000 in value
• 7 years old during the time inception; however there is no age limit after the inception.
As discussed above, the RTV GAP insurance can be purchase up to 7 years of taking the delivery for a refund of up to £25,000.