What is GAP insurance?
New cars can depreciate as much as 20-30% in the first 2-3 years*. As a result, insurance payouts can be much lower than the vehicle purchase price-even for those with full coverage. GAP (Guaranteed Auto Protection) insurance is additional protection to cover this “gap” between what one owes on a financed vehicle and its actual cash value, which is usually lower.
GAP insurance can provide valuable protection during the early years of your car’s life if you have a loan or a lease. If a loss occurs, GAP insurance will pay the difference between the actual cash value of the vehicle and the current outstanding balance on your loan or lease. Gap Insurance protects your vehicle lease or loan. Sometimes it will also pay your regular insurance deductible. If your vehicle has been totaled by accident, theft, fire, flood, tornado, vandalism, or hurricanes your insurance company typically pays the actual cash value. That may be less than its actual retail value. It is often considerably less than the actual amount you still owe on your loan or the amount due for a lease payoff. The amount between your insurance deductible and the loss from this financial shortfall is the “gap” you can be left owing. When you purchase your policy online with CarInsurance.com, most of our carriers offer this coverage. It is labeled Loan/Lease Gap coverage. You can purchase
What does it do? Gap Insurance protects your vehicle’s loan. It covers the difference between what you owe, compared to what the vehicle is worth in case it is totaled for ANY reason, and it also pays your regular insurance deductible. If your vehicle is totaled for any reason – theft, fire, accident, flood, tornado, vandalism, or hurricane – the value that your insurance company places on it may be a whole lot less that its actual retail value – and it is often considerably less than the actual amount you still owe on your loan. Between the amount of your insurance deductible and the loss from this financial shortfall or “gap,” you can be left owing literally thousands upon thousands of dollars. Drivers Select Automotive Loss Protection eliminates the financial gap between what your primary insurance company’s settlement is and the actual loan payoff to your bank, credit union, or finance company up to $50,000 per incident!! Plus, in the process, Drivers Select Automotive Loss Protect
A. When you lease a vehicle, you pay your leasing fee on a monthly basis. But what happens to those payments if the vehicle is stolen or totaled in an accident? Legally, you are responsible for the value of the car. GAP (Guaranteed Auto Protection) insurance fills the gap between the amount you owe on the car and the actual value of the car.
