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    Gap Auto Insurance


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    Obviously, if you lease a car or done a small first down payment when buying it; gap insurance is completely necessary. As it comes out of its name, this kind of insurance covers up the gap between your insurance coverage amount and how much you own the company whenever your vehicle is stolen or totaled. As this kind of service is a lifesaver in some cases, often it is already included in a lease or loan contract. In a case it is not, you may have to look around for it in insurance companies. If this kind of policy goes with the lease, check its price and the coverage options. Sometimes a gap waiver attached to a lease contract may replace gap insurance granting you protection from charges whenever your car is totaled. For persons who finance their vehicles, gap auto insurance may be necessary in some cases as well. Check out if your insurance contract says it is to cover all the fully financed amount in this case you dont need a gap insurance policy.

    Purchasing Gap Auto Insurance

    • Though usually it is bought at the start of a lease, in some insurance companies you may buy it anytime in the term of the lease.
    • Be sure you agree with all terms of the lease.
    • Leasing contracts usually demand you to have collision and comprehensive insurance as well for the reason that gap policy wont work without them.

    Insurance companies have different requirements which you will have to follow in a case your car is totaled or stolen. For instance you might have to go on paying loan payments to compensate the insurance amount. So youd better keep that in mind whenever you loan or lease a vehicle. A gap insurance policy will make you feel protected of any accident that may occur.

    Gap Auto Insurance Coverage

    The name of this policy says it all. This policy coverage will fill the gap between your debt on the auto loan and what your car currently costs, if necessary. It is made especially for such cases when you lose your vehicle being stolen or totally destroyed while the regular auto insurance coverage is less than the amount you owe on your car loan. Also pretty often this kind of insurance is required by a leasing company to protect it from loss or destruction of the vehicle you lease. In a case you loan or lease a vehicle GAP insurance policy will be very useful for you to feel safe with the car. When your car is stolen or totaled GAP insurance coverage will cover the gap between the current car value and your balance on lease and loan. When you lease or loan a vehicle it is safe with the gap coverage. Your usual insurance deductible sometimes will be also paid with it. In a case your car is destroyed by accident, theft, fire, flood, hurricane, act of vandalism, insurance company usually will pay the actual price that is sometimes much less than the current retail value. Frequently it may be much less than the amount of your debt on your loan or money you need for a lease payoff. This gap between the insurance deductible and amount you owe on loan or lease will be covered with this policy.
    Thats an example of how gap works:

    • You purchase an auto for the price $25,000.
    • The down payment is $1000 and now your debt is $24,000 paid in five years for 0% interest loan ($400 monthly payments).
    • Take a physical damage coverage policy (comprehensive and collision) that grants $500 deductible as protection against any damage.
    • While still owing more than the car costs you get into an accident and your car is totally destroyed. the term of the lease.
    • While you owe on the loan $23,500 the insurance company decides that your car costs in cash only $22,000.
    • GAP insurance will cover the gap and sometimes even grant you a deductible for example for $2000.

    Possible Gap Exclusions Policy Rules:

    • Maximum Limit of Loss: $50,000.
    • A gap policy wont work for your entire gap due, when your loan's Original Amount Financed exceeds 120% of MSRP (for new vehicles) or NADA Retail Value (for used vehicles), plus 30% of Value allowable for Additional Financed Items such as Credit Life or Service Contracts.
    • It wont ever cover any penalties due to your loan or lease company such as late charges.
    • The loan amount you have financed is necessary not to be more than $100,000.
    • The loan term limit is 84 months.
    • Your loan is not to have a bigger balloon payment at the term end.
    • The upper limit of APR is 12.5%.

    Gap Insurance Will Close the Gap

    Obviously, if you lease a car or done a small first down payment when buying it; gap insurance is completely necessary. As it comes out of its name, this kind of insurance covers up the gap between your insurance coverage amount and how much you own the company whenever your vehicle is stolen or totaled.

    As this kind of service is a lifesaver in some cases, often it is already included in a lease or loan contract. In a case it is not, you may have to look around for it in insurance companies. If this kind of policy goes with the lease, check its price and the coverage options. Sometimes a gap waiver attached to a lease contract may replace gap insurance granting you protection from charges whenever your car is totaled.

     

    
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