What Is GAP Insurance

What is GAP auto insurance. Well you already know about your car insurance requirements and obligations. You also know that there are additional coverages you can choose to have so that you are well protected in case of most severe accidents. But what do you know about gap car insurance ? Gap car insurance is about as valuable as comprehensive auto insurance if you have not paid your vehicle off yet.

Gap insurance is for when you are still paying for your car and you owe more than what your car is worth. Basically gap car insurance is when your car insurance company will pay the difference in what you will owe the loan provider if your vehicle is totaled and you owe more then what the car is worth. So just to clarify, if you bought a car last month and got into an accident, your auto insurance company will pay for the car for what it is worth at the time of the accident. So if they figured that after one month of use, the car is worth 10% less than what is actually owed on the loan then gap car insurance coverage will pay the difference so you are not stuck in debt for something you are not even able to use anymore.

If you do not have gap car insurance coverage, then you will have to come up with the left over amount. Depending on the type of car and the assessment from the auto insurance company, if things are NOT in your favor you may have to pay several thousands of dollars for a vehicle that is no longer yours or even that you can even drive. When some one does not get gap auto insurance coverage and  later are involved in an accident or end up filing a claim for something minor like an auto theft – that went bad, and the theif damaged the car – they regret the decision. Since the price for gap car insurance coverage is such a small price to pay compared to the actual amount of money owed in the event of an accident where the vehicle is considered totaled and the owner owes more then what the vehicle is valued at.