A Guaranteed Auto Protection (GAP) is considered a valuable resource when it comes to the auto insurance industry. As the name suggests, this form of protection covers you from any financial gap if your car is totaled, meaning that your vehicle can no longer be repaired. However, keep in mind that there’s more to this insurance option than you might expect.
In this article, we’ll share with you what GAP insurance is, how it works, and how it can financially protect you.
GAP coverage in a nutshell
To best describe it, GAP insurance is an optional car insurance coverage that helps you pay off your auto loan when your car is totaled or even stolen. It essentially covers the difference between your vehicle’s actual cash value and the amount left to pay to your auto finance company. In case of an unlikely circumstance that left your car totaled or missing, this coverage steps in to cover your financial responsibility.
How GAP insurance works
There are various instances when your car ends up in a total loss—an insurance term for a vehicle that isn’t repairable or that costs more to repair than its actual worth. As mentioned, it’s also possible that your car has become a victim of theft.
The problem begins if you haven’t paid off your debt yet from the finance company that initially funded your car acquisition. This is where the GAP insurance then comes into the picture. In the event of a fire, flood, theft, or accident that left your car totaled, your insurance company will cover the financial obligations you cannot handle.
Getting GAP insurance
It’s important to assess and decide whether or not it’s worth getting a GAP insurance policy when you first purchase your car. Here’s what you need to take note of:
- When to purchase: It’s good to know that this insurance is added to an auto insurance policy or purchased as a standalone policy. For the most part, it is meant to be used in consonance with a collision or comprehensive coverage you already have with an auto insurance lender. If it’s a valuable add-on to your auto insurance, it’s a good idea to have this included. On the other hand, if your vehicle has a high risk of getting totaled or stolen, you may consider obtaining standalone coverage from a reliable lender, such as from Apex Insurance Agency.
- When not to purchase: Keep in mind that not every vehicle owner needs this insurance. The chances are that your car value exceeds the amount owed, or the premium is too high, practically deeming it as an unnecessary expense. Furthermore, know that this type of coverage is only available if you’re leasing or financing a new vehicle. Otherwise, it wouldn’t make any sense to get this if you don’t owe anything on your car.
At this point, you now have a broader idea of what GAP insurance involves and how it works. To that end, be sure to consider the valuable information discussed above and assess when or when not to purchase one. If you decide to get this insurance policy, be sure to check with your current auto insurance lender or work with a reliable one for a standalone policy. Ultimately, you alone can decide if this optional insurance is right for you!
Are you looking for GAP insurance? We’ve got you covered! At Apex Insurance Agency, our experts can help you get the right insurance policy, whether life, business, or home insurance. If you are specifically looking for reliable auto insurance in Delray Beach, connect with us today to get a quote!