VRI Gap Insurance or Vehicle Replacement Insurance

 

What is Vehicle Replacement Insurance and what can it do for you?


VRI pays the difference between your vehicle's valuation on the day it is written off and the amount of money you would need to spend to buy another vehicle the same age, mileage and condition as yours was on the day you collected it from the dealership


Vehicle Replacement Insurance is possibly the most comprehensive style of Gap Insurance in the UK today. Almost like a return to invoice level of cover but with an added inflation proof aspect. This is because a standard Return to Invoice cover would only give you back the original price you paid, so what if the equivalent vehicle is now thousands of pounds more to replace?

 

 

How Vehicle Replacement Gap works
What is Vehicle Replacement Insurance?

Vehicle Replacement insurance pays the difference between your vehicles valuation on the day it is written off and the amount of money you would need to spend to buy another vehicle the same age mileage and condition as yours was on the day you collected it from the dealership. Even if the price has gone up. If that model is no longer available then settlement would be based on the superseding model

For example, you buy a car today and it costs £19995. Four years later, your car is stolen and subsequently written off, and your insurance company offer you £8950.00. To buy another car the same as was on the first day you collected it from your dealership is now £21825. Your vehicle replacement insurance policy would now top up your insurance companies settlement to the replacement cost. In essence between your two insurance companies you now have the full replacement cost. You can clear any outstanding finance and the chunk in the middle, the deposit and the equity and now the increased cost is yours.
Lets look at a real life example of Vehicle Replacement Insurance.

In 2010 you bought a brand new Volkswagen Golf 1.4 s 5 Door and paid £14150.00. 2 years later your Golf skids on black ice and whilst no one is hurt, your Golf is damaged to the extent where your own insurance company decide to write it off. They duly offer you the market value which according to What Car deprecations calculator is estimated to be £9010.00

Volkswagen have also upgraded the engines and the Golf S 1.4 is no longer available. It has now been replaced with a leaner, meaner more fuel efficient 1.2 TSI. Unfortunately, the price has also risen to £17880. In this example, a Vehicle Replacement Insurance would pay the difference between your own motor insurance companies settlement of £9010 and the £17880 that you would need to spend to buy another new Golf. This means that you would now have the full replacement purchase price (less road fund) which you could use to clear any outstanding finance and the surplus amount, the deposit you original paid, and the model or inflationary increase in price is yours to do with as you see fit.
What makes Easy Gap Policies different?

If you are shopping around on the inetrnet it is very easy to see that we are not the only vehicle replacement insurance supplier. As you may already realise, for good or bad we always prefer to be completely up front, this means acknowledging that whilst in our opinon our policies stand head and shoulders above the rest, there are other providers who can offer similar levels of protection.

What makes our vehicle replacement policies stand out from the crowd? 

Naturally it is a combination of attributes, but primarily we would stress that for us it is the strength of the underwriter, the customer service during the lifetime of your policy and the way in which your claim is settled. This for us is the ultimate test of any policy and one in which our claims teams excel. 

What makes vehicle replacement the best choice for you?

If nothing happend to your vehicle and you simply decided in three or four years time to change, you would not be surprised to find that the lastest new model would cost more. Manufacturers constantly strive to improve and to upgrade both safety and performance and this unfortunatley comes at a cost. Labour rates, raw materiels, transportation all means that we almost expect prices to rise. 

VRI Gap Insurance
 unlike return to invoice which only protects the physical finanical amount that you have paid vehicle replacement protects the replacement cost/standard of vehicle. The easiest way to think of this type of gap insurance is that it performs similar to "new for old" home contents insurance. Replacement Gap Insurance is a real 'inflation proof' gap insurance, as well as protecting against depreciation, like RTI Gap Insurance.

There are lots of reasons that vehicle prices rise, some of which are completely beyond the manufacturers control.

If your vehicle is written off and the cost of a replacement vehicle, equivalent to yours when you bought the Gap Insurance policy, has risen by a few thousand pounds what would you do? Not only do you suffer with the loss on the purchase price, you may have quite a shortfall to make up to the invoice price of a replacement vehicle. Insurance companies simply do not cover these factors in normal car insurance and despite the fact you have 'comprehensive' cover, a total loss can present quite a shock with the insurance payout. However, if you are covered with VRI Gap Insurance and providing that you have chosen a realistic claim limit to cover any increase in future costs, this really can be the gap insurance to beat all others. 

For us our primary concern is always your policy. What happens when you make a claim and how you are looked after. This naturally means that you need to be able to understand your policy and how it will perform.

With this in mind you will be pleased to know that if you are considering a form of vehicle replacement, we would ask you to remember that when it comes to picking a claim limit you will not only need to allow enough room for the depreciation of your own car, but also the appreciation of the cost of a new one. If the average vehicle can lose up to 50% within the first three years alone then a 50% claim limit may be more than adequate for a return to invoice style of cover, but it would not be big enough for a vehicle replacement policy to perform.