What Is Gap Insurance?

What Is Gap Insurance?

Gap-LogoGap insurance, also known as loan-lease payoff coverage, can provide valuable protection during the early years of your car’s life if you have a loan or a lease.

If a loss occurs, gap car insurance will pay the difference between the actual cash value (ACV) of the vehicle and the current outstanding balance on your loan or lease. Sometimes it will also pay your regular insurance deductible.

If your vehicle has been destroyed by a covered sudden event, such as an accident, theft, fire, flood, tornado, vandalism, or hurricane, your insurance company will pay you the actual cash value for your car, if you have comprehensive and collision insurance. This amount is often considerably less than the actual amount you still owe on your loan or the amount due for a lease payoff.  As a result GAP insurance kicks in, and covers the difference between ACV and balance owing.


Protect yourself from unforeseen situations



Do You Need Gap Insurance?

Car ownership can be expensive. Yet in most instances, gap insurance is a “MUST HAVE” expense if you buy a car on credit. If you don’t have it, you run the risk of paying off a pricey car loan for a vehicle that you can’t drive. For only a few dollars a month you can protect unnecessary loses.


Therefore, if your car is written off and you will get insurance payout, you might still end up with a $7,000 loan balance and no car!


Balance owing $18,000.00
Insurance Settlement $11,000.00
Difference (GAP coverage) $7,000.00
Loyalty Bonus* $+500.00
GAP Protection pays $7,500.00


*$500.00  Loyalty Bonus is a credit applied to the purchase price of a replacement vehicle from the same dealer/retailer.

For only a few dollars a month you can protect your family from unnecessary extra cost!



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