Gap protection is an automobile coverage that helps protect you in the event of a financed total loss vehicle. Gap protection is offered by some insurance companies, lending institutions and leasing companies. It pays the difference between the total loss settlement and the outstanding loan amount of your vehicle.
Here’s an example. Let’s say that you buy a new car for $30,000 and that your vehicle is totaled. You racked a lot of miles on the car and that lowered the book value to $20,000.Your insurance pays your claim, based on the book value of $20,000. Let’s also assume that you took out a 6 year loan with a very small down payment, thereby reducing the outstanding loan amount minimally. Your outstanding loan amount is $24,000. Your Gap insurance will pay the difference of $4,000.
There can be eligibility limitations, depending on the company offering Gap insurance.
Age of vehicle owner
Use of vehicle (personal vs. business)
New vs. used vehicles
Age of vehicle
We, at Andrew G. Gordon Insurance Agency, are here to assist with all your personal and business automobile needs. Visit us at www.Agordon.com.
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