Whether it be your house, your stocks and shares, or your car, the value of personal assets are sadly tumbling at a frightening rate.
We are all suffering due to the world wide economic slowdown kicked off by the American sub-prime fiasco and lax lending practices by greedy banks.
How about a big thank you to America and the banks! This devaluation can leave the "average Joe" unexpectedly exposed to financial losses that could be crippling and take years to recover from.
It begs the question; in a world where we are offered insurances for almost anything, can we be protected from these losses? As welcome as it would be, I haven't yet seen an insurance product designed to insure the individual against the erosion of the value of their house or stocks and shares, but in the event your car is written-off, something can be done to protect you against prices falling faster than anticipated.
The answer: GAP Insurance.
What is GAP insurance? Guaranteed Asset Protection .
Effectively it's an insurance policy that covers the policy holder for any financial shortfall there may be between what was paid for the car and the value of the insurance payout in the event the car is written-off due to accident, fire or theft.
For example, you buy a car for £15,000 and a year later write it off in an accident.
As if that didn't hurt enough, here's some salt to rub into the wound, you now receive a payout from your insurance company for just £10,000, a much lesser figure than you had anticipated due to adverse economic conditions.
However, for a relatively small premium, and the help of an expert in GAP insurance to find you the correct level of cover, you could get back the additional £5,000.
Nice, now you can buy a replacement car costing the same as originally paid.
There are a number of different policies types available on the market but the two main ones are:

• Retail Price Protection GAP.
  This policy type will pay you the difference between the amount paid by your insurer and the amount of your original invoice price of the car, generally up to a maximum claim limit of £25,000 depending on the original invoice price.
  
• Financial Shortfall GAP.
  This policy type will pay the difference between the amount paid out by your insurer and the amount still outstanding on your car's credit agreement (if there is a difference), generally up to a maximum claim limit of £25,000 depending on the initial amount financed.
  

It may come as a surprise to many that, according to the Department of Transport 2006 accident figures, there are over 500 accidents each day involving a vehicle and with nearly 25% of insurance claims (excluding those involving damage to glass, personal injury, and theft of personal items) resulting in a vehicle write-off it may be worth considering browsing the web for a GAP insurance policy that suits you.
In a world where unforeseen accidents all to frequently occur both on the road and in banking I hope you agree that it make sense to safeguard your assets.