Car Gap Insurance

Car gap insurance is coverage that will pay the difference between what is owed on a vehicle and what the insurance actually pays on the loan, in the event the automobile is stolen, wrecked, or totaled. This type of policy will help to protect an investment in buying and or leasing an automobile. Standard comprehensive and collision covers fair market value, which may only be 80% of what was actually paid for the vehicle. Since most vehicles depreciate in value immediately after purchase, this could leave the consumer paying off the remainder of a loan after an accident. A consumer should at least consider purchasing auto gap insurance until they no longer owe more than the car is worth.

With this type of policy, the costs are low, possibly only a few more dollars per month. This additional coverage can be initiated at the time of purchase or lease of the vehicle, and some companies will add this coverage onto the standard comprehensive policy at a later date. Car gap insurance covers what most policies don't, basically closing the "gap" between what the consumer owes and what the policy pays. This difference could add up to thousands of dollars that the consumer will be left paying, even if the vehicle is totaled. If a down payment on the vehicle when purchased is substantial it may not be necessary to acquire auto gap insurance. It is best to research and find out, at the time of the purchase, if this type of plan is right for the individual.

Sometimes this coverage is mandatory for leased vehicle purchases depending on the individual's situation and other factors. Auto insurance may be written to fully cover the financed amount of a vehicle, so car gap insurance may not be needed. It is important to always ask questions about auto gap insurance when purchasing a vehicle. If the individual finds out later that the current policy on the vehicle is not covered completely in case of accident or theft, then this policy may be added later. The consumer should take into consideration that in the event of an accident, claims adjusters use various methods to determine value on a vehicle. Dealers surveys, value guidebooks, online pricing, and actual party sales may be used to find the current value of a vehicle.

The consumer should conduct their own research on the value of their vehicle at the time a claim is made. If the value determined by the consumer differs from the adjuster, questions should be asked to find out the difference. Auto gap insurance will help alleviate the concerns that come with being involved in an accident. It is vital to fully protect an automobile investment by going online and seeking out information regarding car gap insurance. No one wants to be left with payments on an auto note, especially when the vehicle is gone due to an accident or theft. A person must consider the costs of not carrying this type of policy. "The slothful man roasteth not that which he took in hunting: but the substance of a diligent man is precious." (Proverbs 12:27)