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Gap insurance is an optional auto insurance coverage that applies if your car is stolen or deemed a total loss. When your loan amount is more than your vehicle is worth, gap insurance coverage pays the difference. For example, if you owe $25,000 on your loan and your car is only worth $20,000, your ...
Buying gap insurance from a dealer can be more expensive if the cost of the coverage is bundled into your loan amount, which means you'd be paying interest on your gap coverage. How to buy gap insurance from your auto insurer. You can typically add gap coverage to an existing car insurance policy or a new policy, as long as your loan or lease ...
Gap insurance through a dealership is optional, but your lender may require some form of gap coverage when you finance your car. Your car dealership may offer gap insurance when you get a new car, but you may be able to pay less by adding gap coverage, or a similar coverage called loan/lease payoff, to your auto policy (instead of purchasing it ...
Gap insurance is most often recommended for new cars, as they depreciate the quickest, but you can typically buy gap coverage for used cars too. Note that some insurers will only sell gap insurance on used cars if they're less than three years old. Gap insurance on a used vehicle can cost very little, so it can provide peace of mind if you owe ...
The point of gap insurance is to help you cover the financial difference between what you owe and what the car's worth. So, if the vehicle is worth more than what you owe on it, you don't have any need for gap insurance. Just be sure to get approval from your lessor if you're foregoing gap insurance or canceling it from an existing insurance ...
Determining whether you have gap insurance through your auto insurance policy is simple. Car insurance documents generally have a page that lists the coverages on your policy, including optional coverages like auto collision coverage and comprehensive car insurance coverage. Look for gap coverage in this list.
Example: Your vehicle is worth $12,000 and is totaled in an accident, but you owe $14,000 on your loan. Your collision coverage pays out $12,000 (minus your deductible), while your loan/lease coverage pays out the $2,000 difference to help cover your remaining loan balance.
In most states, Progressive offers loan/lease payoff coverage, which is similar to gap insurance coverage but with a few key differences. One of the main differences is that the payout for loan/lease payoff coverage is limited to no more than 25% of your vehicle's value, though the exact limit varies by state.
A gap waiver and gap insurance coverage function similarly — they cover the difference between what you owe and the car's actual cash value (ACV) in the event the vehicle is totaled or stolen. While the waiver is attained through your lender or lease company, gap coverage is typically an added coverage on your auto insurance policy or ...
Coverage specifics, including the ability to transport goods, may vary by state ** The Car Insurance Calculator is intended to be an informational tool and serves as a starting point as you select your coverages, limits and deductibles. It does not generate an insurance quote, nor is it intended to recommend specific insurance coverages.