The moment you drive a vehicle off the dealer lot, your vehicle depreciates.
If your vehicle is totaled in a covered loss, you may have to pay out the difference between what you owe and what your vehicle is worth at that time.
Gap insurance covers the difference between what you owe on your vehicle (financed) and what your auto insurance carrier is willing to pay for it (actual cash value).
Car gap insurance (or loan/lease insurance) is sometimes not purchased by our insureds because of the added premium cost or because they assume their Comprehensive or Collision coverage will fully insure their vehicle if it is stolen or totaled. However, you should consider purchasing this coverage as it can be a very costly expense after an auto accident is occurred.
Gap insurance coverage is available for both purchased or leased vehicles.
Call us if we can be of assistance.
This article is intended for informational use only and not to be construed as legal advice