Gap insurance is a type of car insurance coverage that pays for the “gap” between what a car is worth and what the driver owes on their auto loan or lease if the car is totaled or stolen. When your loan amount is more than your vehicle is worth, gap insurance coverage will pay the difference. Gap insurance is also commonly known as loan/lease payoff.
Key things to know about gap insurance:
- Gap insurance pays the difference between what a totaled car is worth and what the driver still owes on their auto loan or lease.
- If you lease your car, made a small loan down payment, or have a car that depreciates quickly gap insurance is something you should consider.
- If your annual mileage is high this may also be worth considering, as driving more than 15,000 miles per year speeds up your car’s depreciation.
“Gap” stands for “guaranteed asset protection.”
For more information on how gap insurance works turn to one of our carriers, Progressive Insurance.
Gap insurance can be purchased from a dealership, but is often substantially more expensive than being added to your car insurance policy. Gap insurance through an insurance company is also the easiest way to obtain it for your vehicle. Not all insurance companies offer gap insurance, so you’ll want to check with your agent to see if your specific insurance company offers gap insurance.
The Insurance Information Institute illustrates there are many factors to consider to help you decide if you need gap insurance, and like all insurance policies, each situation is different.
Many of our carriers offer gap insurance, and we’d be glad to review your situation and help you decide if gap insurance is right for you. Give us a call at 724-575-7237 to get started!