What Is GAP Insurance?

Understanding the Importance of GAP Coverage

Auto insurance is a critical investment in your financial security and is also usually required by law. However, while you’re likely aware of the importance of a suitable policy, there may still be more you can learn about various coverage options, such as guaranteed asset protection (GAP) coverage.

GAP coverage can be critical in ensuring you and your vehicle are adequately covered financially. As your vehicle depreciates in value, you may end up owing more on an auto loan than your car’s actual cash value. Should you experience a total loss, your maximum payout would not be enough to cover full damages without GAP coverage. Fortunately, GAP coverage can bridge this gap and provide a payout for the full amount you still owe on your car.

GAP coverage may be particularly important for those who have made a relatively small down payment (e.g., less than 20%), have an auto loan term longer than 5 years or rolled over negative equity from a previous auto loan. By working with a qualified auto insurance professional, you can ensure you have the right coverage for your situation.

Contact us today to learn more about GAP coverage and other aspects of personal auto insurance.