If you’ve recently purchased a new car near Gahanna, then you may be overwhelmed by the various insurance options available to you. One offering you may have encountered is gap insurance. While gap insurance isn’t a required form of coverage, it certainly is beneficial if you’ve taken out a loan on a brand-new car. What does gap insurance do? Simply put, this insurance is designed to cover the “gap,” or difference, in the amount owed on your vehicle and its true cash value at the time of an accident. Learn more about what gap insurance covers with Byers Collision Center.
So, what does gap insurance cover? Gap insurance applies in many circumstances, but it’s important to note that it is meant to cover vehicle damage, not property damage or bodily injuries (that’s where liability and comprehensive insurance coverage come into play). With that said, here is a list of situations in which gap insurance can be utilized:
Gap insurance is meant to cover the total loss of your vehicle in these instances. On the other
hand, gap insurance does not cover your deductible, engine failure or other mechanical issues,
death or injury, and extended warranties.
As previously mentioned, gap insurance is not a required form of insurance. However, it’s clear that it can come in handy. Let’s say you’ve taken out a loan to buy your vehicle, and you get into a serious accident shortly after making the purchase. Your vehicle will have depreciated significantly, even in that short period, yet you will still owe the full amount on your loan. Gap insurance ensures that you aren’t left to pay that difference when you no longer have the car to drive in New Albany.
When you want to learn more about what different insurances cover, the team at Byers Collision Center is here to help! Reach out to us for any questions or if you need to schedule a covered repair in Columbus, and our team will get you back on the Pickerington roads as soon as possible.
Gap insurance covers the difference (or “gap”) between your vehicle’s true cash value and the remaining balance on your auto loan or lease if the car is totaled or stolen. It applies to total vehicle losses resulting from theft, fire, vandalism, collisions, and severe acts of nature like floods, tornadoes, or hurricanes.
Gap insurance does not cover your standard auto insurance deductible, mechanical breakdowns, engine failure, extended warranties, or bodily injury and death. It is strictly designed to bridge the financial gap of a total vehicle loss, not to replace comprehensive, collision, or liability insurance protection.
No, gap insurance is not a required form of insurance, but it is highly beneficial if you have a loan or lease on a new car. Because brand-new vehicles depreciate rapidly, you could owe significantly more on your loan than the actual cash value of the vehicle if you get into an accident shortly after purchasing near Gahanna or New Albany.
If your car is totaled, your primary auto insurance provider pays out its current market value, and your gap insurance covers the rest of your remaining loan balance. For instance, if you still owe $25,000 on your loan but your car’s true cash value is determined to be $20,000, gap insurance pays the remaining $5,000 difference so you aren’t paying out of pocket for a car you can no longer drive.
