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Return to Invoice (RTI) GAP insurance (sometimes referred to as Back to Invoice Insurance) is a specific type of GAP insurance, and isn’t always what people typically mean when they use the general term, ‘GAP cover’.
How Return To Invoice Gap Insurance differs from standard GAP Cover
In the UK, most comprehensive motor insurance policies only pay the current market value of a vehicle if it is written off or stolen. Because vehicles depreciate quickly, particularly in the first few years, this payout can be significantly less than the price originally paid. Return To Invoice GAP insurance is designed to bridge that gap by covering the difference between the motor insurer’s settlement and the vehicle’s original invoice price.
Other variants of Gap Insurance include Finance GAP Insurance - which focuses on clearing outstanding finance, and Vehicle Replacement GAP insurance - which aims to cover the cost of replacing the vehicle with a similar new one.
RTI Gap Insurance is generally considered to be the most straightforward option, as it simply returns you to your purchase price.
How do GAP insurance claims work?
If your vehicle is declared a total loss, your comprehensive motor insurer settles the claim first, paying the market value at the time of the incident. Once this settlement is confirmed, a GAP claim can be submitted. The GAP insurer then pays the shortfall between the motor insurer’s payout and the insured amount under the GAP policy, subject to policy limits and terms. Claims usually require documentation such as the motor insurer’s settlement letter and the original vehicle invoice.
Gap Insurance and EVs
In today’s motor market, electric vehicle (EV) depreciation is an increasingly important consideration. While EVs often benefit from lower running costs and tax advantages, they can experience sharper depreciation than expected due to rapid advances in battery technology, changes in government incentives and frequent manufacturer price adjustments. As a result, the market value of an EV at the point of a total loss may be significantly lower than its original invoice price. RTI GAP insurance can help mitigate this risk by protecting the amount initially paid, which can be particularly relevant for higher-value EVs or vehicles funded through PCP or HP agreements.
Pros & Cons of RTI Gap Insurance
There are pros and cons of RTI Gap Insurance, as listed below.
Advantages of RTI GAP insurance:
• Includes protection against early depreciation,
• Gives peace of mind for drivers using PCP or HP finance
• Supplies some added financial certainty for businesses and sole traders relying on vehicles for day-to-day operations.
Disadvantages of RTI GAP insurance:
• Adds extra cost onto vehicle purchase
• Need to check for any policy exclusions
• RTI only returns you to your invoice price, not necessarily today’s replacement cost.
As with all insurance, it’s important to check suitability before purchasing. That’s why it’s beneficial to buy insurance using a broker such as Prizm Solutions. At Prizm, one of our friendly brokers will take the time to talk to you about your circumstances, to find out exactly which policy will give you the protection you need for your bespoke personal or business requirements.
As well as GAP insurance, Prizm Solutions can help with many other personal or business insurances, such as Commercial Vehicle Insurance, Loss Recovery Insurance, Office Contents Insurance or Legal Expenses Insurance. We’re always happy to help with any of your insurance queries.
