There are several different types of policy available, depending on how old the car is, and where and when you bought it.
Here are the three types of policy offered by Warranty Direct:
1. Vehicle replacement insurance (VRI) covers the difference between the insurance payout and the cost of a similar new car (same make, model and specification).
This is only available for new cars that are less than three months old and with less than 1,000 recorded miles.
2. Return to invoice (RTI) pays the difference between the insurance payout and the original value of the car when you bought it.
This is available for new and used cars valued up to £120,000 which have been bought from the dealer within the last three months.
3. Return to value (RTV) covers the difference between the insurance payout and the value of your car when you took out gap insurance.
To qualify, cars must be valued under £50,000, bought privately or from a dealership, and have been owned for more than three months.