In the era of ever-growing technology and ever-tightening budgets, it’s no surprise that so many people are turning to supplemental insurance policies, like GAP Insurance, to protect themselves and their assets. And, of course, no one is immune to accidents – even the safest drivers. That’s why, no matter how careful you may be, you need to be aware of the GAP insurance option.
What is GAP insurance?
Unlike comprehensive or collision insurance, Guaranteed Auto Protection (GAP) insurance is a type of supplemental auto insurance that helps cover the difference between what you owe on your car and the value of the car. In other words, if you crash your car and the damage exceeds the value of the car, GAP insurance helps to cover the difference.
How does GAP insurance work?
When you buy GAP insurance, the insurance company pays the difference between what you owe on your car and the value of the car. In other words, if your car is worth $20,000 and you owe $10,000 on it, the insurance company would pay the $10,000 to you. It is important to note that most GAP insurance companies usually have a minimum coverage requirement. This means that you must have at least the minimum amount of auto insurance coverage in order to be able to buy GAP insurance. After you meet this requirement, the company will offer you a policy.
What does GAP insurance cover?
GAP insurance typically covers the following:
- Damage to your car from an accident, theft, and natural disasters
- The cost of buying a new car
- The cost of repairs to your car
- lost wages and any other costs that may come with the accident
Do you need GAP insurance?
There is no one-size-fits-all answer to this question, as the decision of whether or not to buy GAP insurance depends on a variety of factors. However, some factors that may influence the decision include your age, driving history, and car insurance status. Other factors to consider are:
- You paid less than 20% down when you purchased your vehicle
- The term on your auto loan is 60 months or longer
- You are leasing your vehicle
- You purchased a vehicle that depreciates faster than the average
- You rolled the negative equity from an old car loan into the new loan
In these scenarios, GAP insurance would help if your vehicle were declared a total loss.
GAP insurance is an important insurance option, especially if you have a history of car accidents. Talk to the team at Bicknell Insurance and see if gap insurance is right for you. It can help protect you from a number of things, including car accidents, theft, and natural disasters. Make sure you have the coverage you need to protect yourself.