WHAT IS GAP INSURANCE?
Gap Insurance stands for Guaranteed Asset Protection insurance and is an added feature of car insurance that can aid some drivers in covering the “gap” between the financed amount that the driver owes on their car and their car’s actual cash value (ACV) if the care is ever involved in a covered accident and declared to be damaged beyond repair. Gap insurance is not required by insurance or state laws, but may be useful for some drivers.
Gap insurance is right for drivers:
- That put down a small or no down payment on a new vehicle
- Whose car loan requires gap insurance.
- Whose lease requires gap insurance.
- That owe more on their car loan than their car is worth.
That drive more than an average of 15,000 miles per year since high mileage on a car can depreciate the car.
Gap insurance is typically bought through an auto insurer as an added feature of an insurance plan, from the dealership or lender where the car was bought, or through a company that only sells gap insurance.
Gap insurance is not required in the event of a total loss if your vehicle is worth more than the loan, if you are able to continue your loan payments or pay off the loan, do not need to replace your vehicle, or if your loan is only for a short period of time (12 months or less).
Call us for your car accident inquiries, call our head law firm in Irvine, CA. We’ll help you find the answer to your specific question.
