Gap insurance is an extra layer of cover that you can purchase for your car insurance policy. It is a very important option you should consider especially when you are buying a new vehicle with a low down payment or when leasing. Most banks and financial institutions require you to purchase GAP insurance as one of the requirements for a loan on your car. In case your vehicle is stolen or written off in an accident or incident, this cover will pay you for the difference between the evaluated market value of your car and the left-over balance on your loan or lease.
GAP insurance gives a cover in a variety of events when a car is stolen or severely damaged. Regardless of who is at fault or the cause of the incident, GAP insurance still pays. For instance, if there is an accident where you happen to be involved in a total loss a few months after you purchase your vehicle in the market and you have already purchased the collision and GAP cover, your collision insurance will pay for the estimated market value of your car while the GAP coverage will pay the additional amount to the insured under the collision coverage for the entire loss of car and the total debt amount that is still owed to the lien holder for the car.
On another occasion, if not long after buying a new auto, you were involved in an accident where your car got written off, GAPinsurance would likewise help pay for your misfortune. You would require complete cover to pay for the assessed estimation of your auto, and afterward,GAPinsurance would pay for the rest of the sum still owed to your lien holder.
GAP insurance can give you an opportunity to save lot of money. The difference of amount between the appraised value and the one left on a loan can be a considerable sum up to thousands of dollars. Without GAP coverage, you will be personally responsible for paying up the thousands of dollars that is still owed on your car to your lien holder. It is more of a fact that a new vehicle is liable to lose several thousands of dollars in value once it is driven off the dealer’s encampment.
Many car owners do not realize how beneficial GAP insurance cover is until it is too late. They may have the thought their brand new vehicle has a lot of value and there is nothing to worry about. Whereas, buying a brand new card without the GAP insurance may be very risky and irresponsible.
There are wide varieties of incidents that are covered by GAP insurance. For instance, GAP insurance pays when vehicle loss is caused by accident, flood, theft, vandalism, theft, hurricanes, and tornadoes. Car loans are basically front-loaded, meaning that the amount of interest payments is very high in the initial few years of vehicle ownership.
After a few years of vehicle ownership, just as the left over balance owed on the loan reduces below the market value of your car, you can decide to stop your GAP insurance as it is no longer effective and does not make any financial sense to have the coverage going.
The rate of GAP insurance can vary among insurance companies. It is very essential to check around to get the best price. Also, ensure that you read your car policy very well to ascertain any exclusions or limitations on GAP insurance cover. If you are looking for the best GAP cover at a very friendly price ever, then you are on the very right page. Contact us today to get your new car covered!