What Is GAP Car Insurance
and Why You Might Need It?
Why would a GAP car insurance policy be necessary for anyone that is financing or leasing a car?
The reason is because your standard comprehensive and collision car insurance policy only covers you for your new car's fair market value and that is typically only 80% of your car's value.
If you get in a wreck and your car is "totaled" by your car insurance company then you (yes YOU!) will be required to pay the difference between what the balance you owe on your car loan and what your car insurance company deems is "fair market value". And what they call fair market value is often substantially lower than what you might get for it had you sold it just prior to getting in the wreck.
The same scenario goes for your car if its stolen too...and for leased cars too!
If you choose to get a GAP car insurance you to know two things upfront:
1) A GAP auto insurance policy lasts for the life of your primary car loan. It is relatively cheap too.
2) Your vehicle must have been purchased, refinanced or leased within the last 90 days to be eligible for Gap car insurance.
A GAP car insurance policy will cover you for the difference between what you owe on your car loan or lease and what the insurance company says your car is worth.
The most vulnerable time for you is in the first couple of years you own a new vehicle because you are usually known as being "upside down" with your car loan.
Being upside down merely means that you owe more on your car loan than what your car is worth if you tried to sell it at that moment because you didn't have gap auto insurance.
Most new car owners aren't aware that in this situation you're not fully covered by your car insurance company. An inexpensive gap car insurance policy is the solution.
GAP auto insurance will cover you for the "gap" between what you owe on your car and what you're covered by with your primary insurance company. It will also cover you for the deductible on your primary insurance policy too.
For more information on how to handle vehicle accident property damage claims click here or contact our personal injury law firm to discuss your rights.
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