Driver Check For Damage After A Car Accident Before

What is GAP Insurance

GAP insurance is an important financial protection that can help you avoid paying extra money after a car accident. It covers the difference between what it would cost to replace your vehicle and what you owe on your loan. If your car is totaled or stolen, gap insurance will reimburse you for the difference between its actual cash value (ACV) and what you still owe on your loan.

GAP insurance is not required by law but can be a good investment if you have a large loan balance and/or low credit score because it can help protect you from owing more than $10,000 when buying another vehicle.

Why You Need Gap Insurance

The main purpose of GAP insurance is to allow you to maintain your car as a source of transportation while paying back your loan even if it is totaled in an accident or stolen.

If you have a covered claim, your collision coverage or comprehensive coverage would typically help pay for your totaled or stolen vehicle up to its depreciated value. But what if you still owe more on your loan or lease than the vehicle’s depreciated value? That’s where gap insurance may help.

Reasons to Choose GAP Insurance

Gap insurance can be a helpful tool if you are buying or leasing a car from a dealership, have a significant amount of equity tied up in your vehicle, and do not have a large down payment on your loan.

Some new car dealerships may require you to purchase gap insurance coverage for your vehicle when you buy a new car, but this isn’t always an option. When you buy a new vehicle, it’s usually best to ask the dealer if they offer gap insurance as part of their standard policies. However, if you end up needing this coverage after all, give Petruzelo Insurance a call and one of our friendly agents will be happy to help you out.