Contract Hire Gap Insurance

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) January 26, 2012 -- Protect you and your business with Contract Hire Gap Insurance . Have you ever thought how many business vehicles are on the UK roads today. So many companies need the use of a vehicle, or indeed a fleet, to enable their business to function. If companies had to buy each of these vehicles individually, it would represent a financial outlay that few could afford. The answer to this is to lease the vehicle, a simple 'rental' agreement for the use of a vehicle in exchange for a monthy fee. This is commonly known as a contract hire or lease agreement.

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Contract Hire Gap Insurance

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http://easygap.co.uk/21/contract-hire-gap-insurance/

The beauty of contract hire is that it keeps the finances simple, with a fixed monthly rental and the vehicle is returned to the leasing company at the end of the agreement. No outlay for purchase, and no need for disposal, nice, clean and simple.

However, you are responsible for the vehicle you are renting during that period, and this is where the problem begins, or rather what the company thinks they are responsible for.

If you owned the vehicle, you can simply insure the vehicle with a standard motor insurance policy. If the vehicle is written off, then your insurance company would pay you its market value at the time it is written off. You can have the funds to replace the vehicle with another of that age and mileage.

However, what are you expected to do if the lease vehicle you are using is written off, and what can the owner of the vehicle, the leasing company, ask you for?

Well they will ask for the market value of the vehicle when it is written off, this is covered by your motor insurance company.

They can also ask you for a proportion of the outstanding rentals on the agreement. So of you have 2 years to go, and you are paying £400 a month, that could mean you are faced with an additional bill of up to £9,600.

That could be quite a nasty shock for anyone to get!

Has this always been the case with contract hire agreements? Well actually it has for many years, but until recent times you had a an additional safegaurd within your monthly rental payment, this was contract hire gap insurance.

This type of insurance covered any financial shortfall created when the vehicle is written off. As it was included in the monthly rental, many people did not even know they had it. Those who do know what it is can often assume that it is still included.

However, with the advent of the FSA, insurance products can now not be 'included' or imposed on any consumer. These days the onus is on the consumer to choose it of their own will. However, many leasing companies are unable to offer or even mention contract hire gap insurance to their customers. In order to talk about it, they would have to be authorised by the FSA, and as this can be costly and time consuming, many do not offer it at all.

However, you can still protect your lease vehicle with contract hire gap insurance in 2012, via a number of specialist online brokers. This usually requires you to have bought cover withion 180 days of the beginning of your lease, however at a broker such as GapInsurance123.co.uk , you can get Contract Hire Gap Insurance at any time during your agreement.

So if you have a contract hire or lease vehicle, and had no idea that you could be sitting on a financial timebomb, then do not despair, you can protect yourself for the period of your lease with contract hire gap insurance .

More information can be found online at http://easygap.co.uk/21/contract-hire-gap-insurance/