What is Gap Insurance & Why is it Important?

August 13th, 2020

What is Gap Insurance & Why is it Important?

After an auto accident, one of the first hurdles that we help you resolve will be issues related to your property damage claim. There are several different types of coverage that come into play regarding property damage, but one of the most important is gap insurance.

What is GAP Insurance?

GAP stands for Guaranteed Asset/Auto Protection. If your vehicle has been deemed a total loss by the insurance company, the insurance companies are obligated to pay for what the vehicle is worth on the day of the collision. If your vehicle is not fully paid off, you may owe more for the vehicle than what it’s worth. Gap insurance coverage will pay the difference between what the vehicle is worth vs. what you still owe on the vehicle.

How Do I Know If I Need Gap Insurance?

According to the Insurance Information Institute, you’ll want gap insurance coverage if:

  • Your down payment is less than 20%
  • The vehicle is being financed for 60 months or longer
  • You are leasing a vehicle (this is generally required for leasing)
  • You purchased a vehicle the depreciates faster than the average vehicle
  • You rolled over negative equity from a previous car loan into the new loan

How Do I Get Gap Insurance?

You can opt in for the gap insurance either with the car dealership where the vehicle was purchased, and it is typically also offered through your auto insurance company. You can check rates for both to find the best price that works for you.

It’s Good to Know Mike Bottaro – 24/7 Top Rated Car Accident Legal Help

At the Bottaro Law Firm, we handle all types of personal injury cases such as car accidents every day.  Honesty. Integrity. Results.  Our experienced legal team is here to fight for your rights. Contact us in any method you prefer 24/7 for a fast, free, and confidential consultation about your case. Text or call: 401-777-7777 or fill out our free and confidential online form.