Any car owner who has been in the driver’s seat for a while will have a good deal of experience with car insurance.

You will know that your insurance will normally, at the most basic level, cover third party fire or theft.

Although a large proportion of the general driving public will go throughout the year with no bumps in the road (pardon the pun), it’s important to remember that every minute, a vehicle is stolen in the UK, a third of which are never recovered.

With this in mind, if you are one of the unfortunate bunch who has their car taken or if you are involved in an accident where the car is deemed a write-off (whether this is your fault or not) then your insurance company will normally pay out the car’s full value if you have fully comprehensive insurance.

However, what is the value of the lost car?

Let’s say you bought your brand new motor for £20,000 just over a year ago. Already the car would have reduced in value down to £15,000 – in a car’s first year its value drops approximately 25%. It is this depreciated value that the insurance company will be prepared to pay out.

As most new cars are not bought outright, and are purchased with the aid of some form of finance, unfortunately you would still owe the financiers the full amount, despite losing out on £5000 through insurance and no longer owning the car in question.

It is this shortfall that facilitates the growing need for Gap insurance.

Typically, a GAP Insurance Policy will be a small one-off payment in order to protect your investment and they are quickly becoming an essential part of insuring your car or motorbike.

In the same way that many of us may begrudgingly purchase car insurance (it’s a legal must so no avoiding it!) although we may not always use it, it’s better to have it and not need it, than to not have it and pay the price later.

This is never truer than in the case with Gap insurance. It’s an investment.

Car dealers will often try and add this on when you purchase a new vehicle, but as with your regular annual insurance, it’s a good idea to shop around. You’ll be glad you did.

This article was written for Drive.co.uk by, ALA a specialist GAP Insurance site