Are there circumstances when GAP insurance doesn't pay out?

Yes, the policy wording explains in detail all exclusions; however, in line with some already mentioned, the most common reasons a GAP policy will not pay out are:

• If your main vehicle insurance policy insurer refuses your claim.
• If a fraudulent claim is made.
• If you decline an offer of a replacement vehicle under the terms of your Vehicle Insurance Policy, then your GAP insurance will settle your claim based on the value of the replacement vehicle and not the settlement figure offered under your main vehicle Insurance Policy.