fbpx

Gap Insurance

Gap Insurance totaled

Car Insurance is Complicated

Gap insurance: it seems like there’s always something about insurance that we don’t know. There are so many different types of policies and details. Which one is best for you? Is gap insurance something that you need? What is it? Will it cover all totaled vehicles? This article will explain this type of insurance and dispel any myths that might be floating around.

What is Gap Insurance?

Most of us are not lucky enough to be able to walk into a dealership and write a $30,000 check for a new car. More often than not, we are financing or leasing the vehicle we drive. If that is your situation, then gap insurance might be right for you. Essentially, it covers the “gap” between what you owe and what the car is worth. In order to determine this number, you must consider depreciation. Unfortunately, new cars lose value the very second that you drive away in them. After that, they will steadily decrease in value over time as you pay off your loan. During that time, you are living in the “gap”.

How Does Gap Insurance Help You?

If we are fortunate, we never have to worry about filing a claim for a totaled vehicle. Still, it happens to people every day. When you contact your insurance company after a serious collision, they will review your policy and coverage. Without gap insurance, they will cover the car’s current value. So, let’s say your car is worth $18,000 at the time it is totaled. However, you still have a loan of $21,000 that you are paying off. That leaves a gap of $3,000 for which you are now responsible. And, you no longer have that totaled car. So, you are left with a bill for a nonexistent vehicle. This is where gap insurance is a saving grace.

When You No Longer Need Gap Insurance

Gap insurance is only necessary when there is a gap between what you owe and the car’s value. Once you have paid off your loan and own the vehicle, you will no longer need gap insurance. Also, if you are not leasing, it isn’t necessary. And if your car is worth more than you owe, this isn’t something to worry about.

What Are the Next Steps?

It’s a good idea to contact your insurance provider and see if you currently have gap insurance. If not, ask how much it might cost to add it to your policy. After that, the best thing to do is compare with quotes from other companies that offer all the types of coverage you need. Now may be a good time to switch. You never know what the future holds. Insuravita helps insure that you’re ready.  

Auto Listings
Motorcycle Listings
Life Listings
Health Listings
Home Listings
Small Business Listings

Leave a Comment





This site uses Akismet to reduce spam. Learn how your comment data is processed.

RECENT POSTS

Average Cost for Teenage Drivers

June 5, 2019

It is stressful to be a teenager and stressful to raise a teenager. And everything changes at age sixteen. Suddenly, teenagers are learning to drive and there are so many…

Read More

Health and Happiness: Activities Good for Body and Soul

May 28, 2019

There are so many factors in day to day life that affect your overall health and wellness. Stressful situations in work and social life can create issues like insomnia and…

Read More

Small Business 101: Starting a Business in California

May 13, 2019

As the saying goes, there is no reward without risk. There is always risk when starting a business. A lot of this risk comes from uncontrollable circumstances like an economic…

Read More

Can You Be Denied Coverage? Pre-Existing Conditions 101

May 6, 2019

A pre-existing condition is a medical condition that someone has before securing health insurance coverage. These are previously diagnosed conditions that are part of the individual’s medical history. Some examples…

Read More

First Time Car Purchase: A Millennial’s Guide to Negotiation

April 29, 2019

The art of negotiation has been studied for centuries. People want to know how to walk away from every situation as a winner. A negotiation means that each party leaves…

Read More

How to Make Your Small Business a Success

April 21, 2019

When starting a small business there are so many things to consider. The top concern is how you are going to make your company stand out from the crowd. The…

Read More

Things to Pay Attention to When Buying an Older Home

February 10, 2019

Buying a home is one of the most stressful processes a person can go through. To start, you have to find a home in the right price range with the…

Read More

Why you Should Shop Regularly for Insurance

February 10, 2019

By human nature we love to have the latest and greatest. From technology to fashion we are always looking for something new. We love having something new and even better,…

Read More
%d bloggers like this: