GAP Insurance
What Is GAP Insurance? GAP Insurance which stands for Guaranteed Asset Protection is an optional add-on product that offers you additional protection if your vehicle is deemed a total loss due to accident or theft. GAP covers some or all of the difference between the actual cash value of your vehicle and your loan balance owed to the leasing or finance company.
GAP Insurance Requirements
GAP is supposed to cover the loss you would suffer if your loan balance is higher than the value of the vehicle. Many new car owners owe more on their vehicle than it’s worth (an "upside-down" loan-to-valuation). You may find that your primary insurance carrier’s settlement probably won’t completely cover the vehicle if it’s declared a total loss. In the event that your new or used vehicle is stolen or wrecked beyond repair, GAP insurance can come to your rescue. GAP helps pay the potential high-dollar difference between what your primary insurance settlement provides and what you owe on your loan on items directly related to the purchase of your vehicle.
Always review your policy or contact your agent to identify the limitations and exclusions of your coverage.
