Vehicle replacement insurance is a type of gap insurance which is available for all vehicles. The only limiting assumption is that the car, minivan, van, SUV or truck needs to be financed, purchased on a personal loan or simply owned outright. This kind of GAP can be taken out both by private individuals and companies. It might be good to remember that the vehicle for which the vehicle replacement insurance is purchased does not have to be new. In fact – quite the opposite, as the car or van can be up to five years old – depending on the insurance provider policy. Also, the period of cover can be for up to four years from the date of taking the car ownership. In the case of a write-off, the motor insurance provider is supposed to pay what is believed to be the current market value for the vehicle. Therefore, this is usually substantially less than what the driver paid for it. The insurer, in turn, will pay a nominated dealer their settlement and the gap Vehicle Replacement Insurance will pay the dealer the difference in the value of replacing the damaged or stolen car with a new one of the same (or similar) specification as the original vehicle. And if the insured car or truck was not new, then the replacement will be undertaken with a vehicle of similar age.