When looking into car insurance you may wonder what is gap insurance for cars and there may be many questions that you have such as can i obtain gap insurance if i have liability coverage, what does gap coverage cover and could it be beneficial in the long run, where can i obtain gap coverage, what are certain circumstances where gap insurance is not needed, how much would it cost to add gap insurance to your existing policy, when is gap insurance not necessary, when i have to lease or finance a vehicle is gap insurance mandatory, or if i have full coverage what are some of the reasons someone might need gap insurance.
At A Plus Insurance we have all the answers ready to help you!
Insurance with gap coverage
When clients shop around looking for the best rates for full coverage insurance they may ask themselves what is gap insurance for cars and if having gap insurance is mandatory or helpful in the long run and we have the answer!
Insurance with gap coverage is a form of asset protection for any client that has leased or financed their vehicle, and if any event your vehicle either has been totaled or stolen the insurance company would pay the difference between the car’s worth and your lease.
Typically when this happens your collision and your comprehensive coverage would cover the cost. Also when it comes to gap insurance there are few instances where it would be actually a great idea to add this coverage to your policy.
Some of the main reasons you should consider insurance with gap coverage are when you are in debt to your loan and owe more than the actual worth of the vehicle, or in the event that your car is either totaled or stolen.
It is also a good idea to get insurance with gap coverage if you are planning to potentially put a good amount of miles onto the vehicle as well causing the car to go down in value, or put up less than twenty percent on the vehicle.
You also may be wondering how to actually obtain insurance with gap coverage and well it’s actually quite simple , First you have two options on how to gain gap insurance you can either purchase gap coverage from the dealership at the time of the purchase of the vehicle, Also there is a possibility that you could obtain such coverage with either a bank or a credit union, and by buying gap coverage with your insurance company as well.
It is quite recommended that if you are interested in getting insurance with gap coverage to go through your insurance company as it is actually quite cheaper than going through any other options listed above.
Now you may be asking yourself what is the estimated price of gap insurance or how long you would need to keep insurance with gap coverage if you were per say leasing or financing the vehicle.
As far as how long you would need to keep the coverage to benefit you it would be in your best interest to keep this coverage for one to three years but you can keep gap insurance for as long as the length of the loan or lease you get when you purchase the car from the dealership and its best is to cancel the insurance if the cost is less than the lease.
Also, when it comes to the cost of gap insurance it can range from two-hundred dollars to seven-hundred dollars so it’s very important to shop around through different insurance companies and find the best rate that works for you.
Is gap insurance required?
You may be asking yourself if gap insurance is actually required to have on top of your car insurance expense, however, gap insurance is not mandatory under certain circumstances in any of the fifty states and actually it is only beneficial if you are in certain situations listed above.
However depending on the lender or the dealership you might have to obtain gap insurance so its best to check with your lender or dealership on what the requirements are specifically.
There are also cases where gap insurance is actually not required and rather not recommended. Some of the scenarios of this are if you bought the vehicle outright and if you take out a loan while also being able to financially put down a larger payment down then gap insurance may not be beneficial to you.
Now you may be wondering what are some of the circumstances where gap insurance can not or can cover you well. We have the answer listed below:
|types of situations||Definition||Does Gap Insurance cover this?|
|vehicle repair||vehicle repair is the repair or replacement of frames and bodies, which include painting of the car, fixing the engine, transmission, or wheels.||no|
|car injuries||severe open wounds due to the cutting or the tear of the skin an flesh of a car accident.||no|
|damage to another individual property||injury to real personal property through negligence, willful destruction or by some act of nature.||No|
|deductible cost||the amount you pay out of pocket on your claim before your insurance company pays it out.||No|
|death||the act of dying after a fatal crash.||NO|
|rentals or replacements||a car that you buy or lease from a car leasing agency for a period of time.||NO|
|theft||the criminal act of stealing or attempting to steal a motor vehicle||yes|
|negative equity||a negative equity is when you have to pay more on the loan than the actual car itself.||yes|
|extended warranties||an extended warranty is an insurance policy on your vehicle which is a safety net against unplanned repairs||no|
|reduced value after accident||a claim that compensates the driver for the drop in a car resale after an accident.||no|
It can be quite confusing on what is the best decision for you whether you should gap insurance to your policy or skip however you should always keep in mind how to make sure the car depreciation isn’t going to hurt you in the long run and you keep the value of your car and if you’re interested you might wanna consider looking into different insurance companies to speak with an agent about what is the best approach to adding gap insurance as soon as possible.
Regardless, A Plus insurance is here to help you make the best decision for you!
Last Updated on by Veronica Moss