What is Gap Insurance?

vw-camper-336606_960_720As the old adage goes: You lose 10% of value the moment you drive your new car off the lot. This drop in value creates a “gap” that is hard to cover for most people if an accident occurs on a financed car, and this is where Gap Insurance comes into play!

Gap Insurance pays the difference between the balance of a loan on a vehicle and what your insurance company pays if it is stolen or totaled in an accident. If you are looking to insure a financed car, this will be a coverage that you would use to cover what you owe on the car in full if it is totaled or stolen and the car insurance payout is too low!traffic-332857_960_720

Unless you are buying rare exotic sports cars, your car will depreciate in value relatively quickly and you may end up with a lower payout than what you owe if you have an accident. It’s best to be prepared for all scenarios, and this is always a good type of coverage to consider!\

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