Gap Insurance

Gap insurance is an additional type of car insurance that covers the difference between a vehicle’s current market value and the amount owed on the loan or lease agreement. It can be beneficial in cases where a vehicle has been totaled, stolen, or subjected to uninsured damage. Gap Insurance is designed to give drivers additional financial protection in case of such an event.

Depending on the insurance provider, Gap Insurance is sometimes called Guaranteed Asset Protection (GAP) Insurance, Loan/Lease Gap Coverage, and Gap Waiver Insurance.

Unlike Comprehensive and Collision coverage, which typically only covers up to the actual cash value of a vehicle at the time of loss, Gap Insurance will cover the difference between what is owed on a loan or leased car and what it’s worth in today’s market. This can be especially helpful for drivers who owe more than their vehicles are worth due to depreciation over time.

Additionally, if a driver has an accident that results in a total loss they may still owe money on their loan even after they receive their insurance settlement check. With Gap Insurance, this remaining balance can be covered up to predetermined limits set by each individual policy provider.

In summary, Gap Insurance is designed to provide extra financial protection for drivers when they are unable to recover their entire loan balance due to depreciation or other unforeseen circumstances such as an accident or theft.