GAP insurance is also termed Guaranteed Asset Protection or Guaranteed Auto Protection insurance. This term is used because it bridges the gap between the payment on the original insurance policy and the car loan owed by the client. Car GAP insurance is an important insurance feature that helps people with payment of their deductibles. The GAP policy covers the difference between what the insurance company plans to pay and what you owe on the car purchased.
What does Gap coverage do?
It is a quintessential purchase to prevent unfortunate risks. In such a circumstance, GAP insurance steps in and ensures you are covered. Most often, the collision coverage is not enough to pay off an underlying loan, which is why it is important to purchase GAP insurance. Imagine a scenario in which a brand new car that was purchased 2 weeks ago got involved in a terrible accident and ended up getting totaled.
Considering the known fact that a car depreciates in value the moment it is purchased, it means you probably owe more than the actual cost of the vehicle. For someone that didn’t purchase GAP insurance prior to the accident, they are left with no choice but to keep making payments for the totaled vehicle to cover the underlying debt. However, for someone that purchased GAP insurance prior to the unfortunate incident, GAP coverage bridges the gap between what the car is worth and what the car owner owes. Sometimes, GAP insurance also covers the regular auto insurance deductibles of car owners.
Who gives you the best insurance deal?
It doesn’t cost so much to purchase GAP insurance provided you purchase it directly from acar insurance company. It is not advisable to go through a middle man because you might end up paying quadruple of the actual cost for GAP coverage. After a thorough thought about if you need to cover your car. For those that don’t completely pay for a car immediately after purchase, GAP insurance can help you with payment differences under certain circumstances. While most people prefer to take the risk, the cost of the after math by far outweighs the cost of purchasing GAP coverage premium prior to purchasing the vehicle. It makes no sense to go through the pain of paying for an incurred loan when your car is in the junkyard. GAP insurance steps in and helps you with an underlying loan even when the vehicle has been completely smashed and reduced to a metal.
GAP insurance is totally worth it if your car gets totally smashed. The purchase of GAP insurance cleans the slate for you, instead of having to go through the torture of paying for a totally smashed vehicle. It covers the financial obligations of clients that are victims of an auto wreck or car theft. With a clean slate of the previous debt, you can purchase a new or any form of vehicle as a replacement of what was lost.
Contact your insurance agent to find out more details about GAP coverage.