# GAP insurance in Germany: the shortfall after a total loss

> If a leased or financed car is written off or stolen, German comprehensive cover (Vollkasko) pays its replacement value on the day of the loss. The leasing company or bank settles the contract on its own terms, and that figure is often higher. GAP cover pays the difference. It is usually an add-on to comprehensive cover, sometimes a separate contract sold by the dealer or the car bank.

Quelle/Source: https://www.nammert.com/en/insurance-broker-gap-insurance.php  
Updated: 2026-11-11

## What does GAP insurance pay in Germany?

After a total loss or theft it pays the difference between what your comprehensive insurer pays (the replacement value, Wiederbeschaffungswert) and what the lessor or bank still claims under the contract (the settlement value, Ablösewert, or the outstanding loan). It does not pay for repairs and it does not replace comprehensive cover. It needs one to sit on top of.

## At a glance

- **Compulsory?:** Not by law. Some lease contracts require it
- **Pays on:** total loss and theft, not repairs
- **Measure:** settlement value or loan balance minus replacement value
- **Form:** add-on to comprehensive cover or separate contract via dealer or car bank
- **Cost:** roughly €50 to €150 a year as an add-on or separate policy, sometimes included

## Why there is a gap at all

A new car often loses 15 to 25 percent of its value in the first year. Lease or loan instalments reduce the debt more slowly, especially with a small down payment, a long term or a large final payment. The car is worth less than you owe.

An example: after a theft the lessor settles the lease at €27,000. Your insurer pays the replacement value of €22,000. You owe the remaining €5,000 for a car you no longer have. That is the amount GAP cover takes over.

## Add-on or separate contract

Many German motor insurers offer GAP cover (GAP-Deckung, sometimes called Differenzkasko) as an extra to Vollkasko, in some tariff lines at no extra premium. It then runs as long as both the comprehensive policy and the lease or loan run. If you switch motor insurer, the add-on has to be included again in the new policy.

Car banks, leasing companies and dealers also sell stand-alone GAP contracts, often for a single premium that is added to the finance. They do not depend on your motor insurer but end with the finance contract. Check first whether your lease or your comprehensive policy already includes the cover, otherwise you pay twice.

## What GAP cover does not make good

GAP follows the comprehensive policy. If that insurer reduces its payout for gross negligence or a breach of duty, many terms do not top up the reduction. The deductible of the comprehensive policy also stays with you unless the tariff says otherwise.

The lessor's settlement contains items that have nothing to do with loss of value: arrears, excess mileage, fees. Whether these are paid differs between policies. The Federal Court of Justice held in 2014 that the clause protects the lessee and requires that the lessor actually claims the settlement value from the lessee (case IV ZR 16/13).

## What is covered

- Difference between replacement value and the settlement value of the lease
- Difference between replacement value and the outstanding loan, if the tariff includes financed cars
- Total loss by accident, fire or natural hazard, where the comprehensive policy pays
- Theft of the whole vehicle
- Economic total loss as defined in the tariff
- Depending on the tariff, the comprehensive deductible or an initial lease payment

## What is not covered

- Repair damage short of a total loss
- Losses the comprehensive policy does not pay, such as intent
- Reductions for gross negligence, depending on the terms
- Arrears and default interest
- Excess mileage and charges for excessive wear, depending on the terms
- Financed extras such as servicing or warranty, depending on the terms

## Who needs it

- Lessees with no or a small initial payment
- Buyers financing without a deposit, over a long term or with a large final payment
- Drivers of new, expensive cars that lose value quickly
- Businesses with leased company cars whose fleet policy has no GAP cover

## Who does not need it

- Cash buyers: there is no outstanding claim and so no gap
- Anyone who paid a large deposit or is close to the end of the loan: the balance is usually below the value of the car
- If the lease contract or the comprehensive tariff already includes the cover
- If new-for-old cover runs for the whole contract term and the settlement value stays below it

## What it costs

GAP cover is one of the cheaper extras in German motor insurance because it only pays on total loss and theft. Some comprehensive tariffs and lease packages include it at no extra premium.

| Example | Typical range |
| --- | --- |
| GAP cover for a leased car, as an add-on to comprehensive cover or as a separate contract | roughly €50 to €150 a year |

**What drives the premium:**

- Value and type of vehicle
- Term of the lease or loan
- Initial payment, deposit and final payment
- Add-on with a running premium or separate contract with a single premium
- Maximum payout and extras such as refund of the deductible

_Guide figure from German leasing and comparison portals, as of 2026. If a single premium is added to the finance you pay interest on it. Your premium is only fixed in the quote._

## The policy levels on the market

- **Included in comprehensive cover:** Some tariff lines include GAP for leased cars at no extra premium. Check whether loan-financed cars are meant as well.
- **Add-on to Vollkasko:** Extra for a running premium with your motor insurer. One claims handler, but it ends when you switch insurer.
- **Stand-alone GAP contract:** Through the car bank, lessor or dealer, often with a single premium and a maximum sum. Independent of the motor insurer, sometimes with purchase price protection.

## How to recognise a good policy

| Criterion | Minimum standard | Strong policy | Why it matters |
| --- | --- | --- | --- |
| Contracts covered | leasing only | leasing, loans and balloon finance | Many add-ons name leasing only. If you finance, you need loans named expressly. |
| Maximum payout | fixed cap or percentage | up to the full difference | With expensive cars the gap can exceed a fixed cap. |
| Comprehensive deductible | stays with you | refunded as well | Otherwise you still pay the deductible despite two layers of cover. |
| Initial payment | not taken into account | refunded pro rata | A large initial lease payment is otherwise lost after an early total loss. |
| Deductions in the settlement | arrears, excess mileage and fees excluded | exclusions narrow and clearly worded | The fewer items are taken out, the smaller the remainder you pay. |
| Switching motor insurer | cover ends with the policy | cover continues or is independent | If you switch every year the add-on is easily lost without anyone noticing. |

## Insurers on the German market

GAP cover is offered by many German motor insurers as an extra to comprehensive cover, and by the insurers of the car banks. The list is a market overview, not a statement about who we work with. Which tariff currently includes the cover is settled in the quote.

- **Allianz**: describes GAP cover with its motor policy, tied agents and brokers
- **R+V**: insurer of the cooperative banks, GAP cover as an extension of motor insurance
- **Zurich**: German branch of the Zurich group, describes GAP cover for leased cars
- **CosmosDirekt**: direct insurer of the Generali group, does not work with brokers
- **Volkswagen Autoversicherung**: insurer associated with Volkswagen Financial Services, sold through dealers and leasing
- **Sparkassen-Versicherung Sachsen**: public insurer in Saxony, GAP cover in private motor insurance
- **VHV**: mutual-owned, strong in broker distribution

95 insurers supervised by BaFin, the German regulator, are licensed for this class of insurance. (Finanzielle Verluste, Gewinnausfall). Source: BaFin company database, 2026-09-18; EU insurers without a German office excluded.

## Typical claims and who pays

- **Leased car stolen after eight months** (gap often several thousand euros): The insurer pays replacement value, the lessor claims the settlement value. Only GAP cover carries the difference.
- **Write-off in year two of the lease** (settlement value minus replacement value): The classic case. Without GAP you pay for a car that no longer exists.
- **Financed car burns out** (loan balance minus replacement value): Many add-ons apply to leasing only. Strong tariffs expressly include loans and final payments.
- **Accident with a €9,000 repair** (repair cost): As long as it is not a total loss, the comprehensive policy pays the repair. GAP has nothing to do with it.
- **Write-off with 20,000 km over the limit** (excess mileage charge): Excess mileage is a contractual charge and usually excluded. That part of the settlement stays with you.
- **Write-off with a €1,000 deductible** (€1,000): The insurer deducts the deductible. Strong GAP tariffs refund it, basic ones do not.

## Myth or truth

- „Fully comprehensive cover pays whatever I still owe the lessor." ✘ No. It pays the replacement value of the car on the day of the loss. What the lessor claims under the contract is a separate calculation and often higher.
- „GAP cover only pays on total loss or theft." ✔ Correct. Repairs are for the comprehensive policy. GAP only comes in when the contract is settled early because the car is destroyed or gone.
- „With new-for-old cover I do not need GAP." ✘ Only at the start. New-for-old usually applies for 12 to 24 months, and leases and loans often run longer. After that the gap is open again.
- „If I paid cash I do not need classic GAP cover." ✔ True. Without a lease or loan there is no outstanding claim and no gap. Cash buyers can at most take purchase price protection, which is a different product.
- „The GAP clause protects the lessee, not the leasing company." ✔ That is how the Federal Court of Justice saw it in 2014 (IV ZR 16/13): the clause requires that the lessee is actually held liable for the settlement value.

## Common mistakes

- Buying GAP at the dealer although the lease or the comprehensive policy already includes it
- Switching motor insurer and forgetting the add-on in the new tariff
- Assuming new-for-old cover replaces GAP for the whole term
- Choosing an add-on that only covers leasing when the car is loan-financed
- Expecting excess mileage and arrears to be paid

## FAQ

### Is GAP insurance compulsory for a lease in Germany?

Not by law. Lessors almost always require comprehensive cover, and some also require GAP. Your lease contract says what applies to you.

### How much does GAP insurance cost in Germany?

As an add-on to comprehensive cover or as a separate contract, roughly €50 to €150 a year. Some tariffs and lease packages include it at no extra premium.

### Do I need GAP with a mileage lease?

The question arises with every lease. With a mileage lease (Kilometerleasing) the lessor also settles early after a total loss or theft, and the settlement value can exceed the replacement value.

### Is new-for-old cover not enough?

Often not for the whole term. New-for-old cover (Neupreisentschädigung) usually applies for 12 to 24 months from first registration, and leases often run longer. After that the insurer pays replacement value only.

### Does GAP pay for repairs?

No. It pays only if the car is destroyed, an economic total loss or stolen. Repairs are a matter for the comprehensive policy.

### Does it cover a car bought on a loan?

Only if the tariff includes loans expressly. Many add-ons are limited to leasing. With balloon finance the gap is often particularly large.

### Who receives the payout?

In practice usually the leasing company or the bank directly, because that is where the claim sits. The person protected is the lessee, who would otherwise have to pay the difference.

### I am new to Germany. Is this the same GAP I know from home?

The idea is the same, the form may differ. In Germany it is mostly a clause in the comprehensive policy or a contract tied to the lease or loan. Check what your lease already includes before you buy anything extra.

## Legal basis and sources

- [Insurance Contract Act (VVG, German)](https://www.gesetze-im-internet.de/vvg_2008/)
- [BaFin company database (licensed insurers)](https://portal.mvp.bafin.de/database/InstInfo/)

## Request quotes

We obtain quotes and come back with a comparison, free of charge. You can write in English. https://www.nammert.com/en/insurance-broker-gap-insurance.php#anfrage

---

Your broker: Norman Nammert, trading as NAMMERT. Insurance broker licensed under section 34d(1) of the German Trade Regulation Act. Broker register no. D-C08Q-TOSD4-37. NAMMERT Assekuradeur GmbH is a separate company. It does not arrange your contract.

NAMMERT Assekuradeur GmbH, Karl-Marx-Straße 4, 15711 Königs Wusterhausen, +49 3375 29 12 77, info@nammert.com. Wikidata: Q141141479.