Gap Auto Insurance Explained
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When the average person thinks of gap auto insurance, they have no idea what it is or if they should add it to their policy. They think they are missing something that needs to be filled in like a hole in the wall. This added level of protection for your vehicle is not that hard to understand, however. Let us take a closer look at it and you can decide for yourself if you need to get it. Gap insurance will cover you for the dollar amount difference between your vehicle’s current value and the amount you owe to pay-off it.
So let us say you owe $25,000 to the bank for your sports car that is depreciating like crazy. If the blue book value has it pegged at about $18,500, you would have spread there of $6,500 that could come back to bite you in the unfortunate event you were to get into an accident that totaled it. This happens a lot when a person buys a car with very little or no money down. When they drive the vehicle off the lot, it depreciates several thousand dollars and continues it slide in value.
For most consumers, this is a major drawback to buying a new car. Not only does it depreciate fast, causing you to lose your money, but you need extra coverage that is expensive, to repay that car if you ever total it. When you buy insurance, a reasonable plan will insure your automobiles present market value. The problem for some consumers that have rapidly depreciating vehicles is the value can be way lower than their bank loan or payoff amount due. This is where you need to fill in the gap in coverage with added protection, which will not only reimburse you for accidents but also if a theft happens.
Before you even think about adding gap ins onto your policy, you need to have a basic insurance plan set-up. This means being compliant with your state’s insurance mandates, such as having adequate liability coverage in addition to any other state insurance law. Because each state has their set of local insurance laws, check the specific mandates in your area first before you get covered. For example, every state except New Hampshire requires liability insurance, and some also require you to purchase certain amounts of uninsured motorist ins. If this sounds a bit confusing, don’t worry. Good to go has some of the best rates on gap insurance and we will walk you through the entire process of buying a policy online. Get your free quote now and get special discounts that could save you hundreds.
Gap Insurance Basics
* If your automobile is leased, in most cases gap coverage will be added to the lease payments.
* If you are delinquent or late in paying off your auto loan, and your vehicle is totaled or stolen, the gap ins will not give you a payout for the money owed that was not paid.
* You will not be covered for Gap Insurance if you do not have a primary policy in place at the time of an accident.
* If your total loss claim was denied for any reason, such as fraud, your additional gap insurance will not kick in.
* State’s have different laws about gap coverage on used vehicles, refinanced cars, leased autos and SUVs when they are bought or refinanced with-in a one year period.
* It is not sufficient proof of automobile insurance if you are registering or renewing your vehicle with the DMV.
* You cannot transfer your gap policy to another car
You should seriously think about getting gap auto insurance if your car is worth much less than the loan amount. Many consumers do not add it on and later regret not buying it after a serous accident that totals their new car. On the other hand, if you put a big payment down, and the loan amount is what your car is currently worth, you might not need to get it. Many loan companies, however, will require you to get gap ins to protect the investment they have made.
To get the best rates on the gap and other insurance products, get a fast quote with good to go insurance. You can save hundreds by comparing the cheapest rates from top carriers in just a few minutes. Get started now and see how much you can save on-line.