Automobile Gap Insurance

Your automobile gap insurance is very important if you are financing your automobile purchase. Driving a vehicle is a privilege that many people in the country enjoy. While driving can be very enjoyable and liberating, it also can be a potentially dangerous practice. As safe of a driver as you may be, accidents and problems can happen to just about anyone. When you are involved in an accident, you may end up facing some very high financial consequences. Just one accident can cost the responsible party hundreds of thousands of dollars, and you will want to have the right amount of coverage for your automobile.

There are many different types of automobile insurance. Auto gap insurance is one of the most specialized types of coverage that you can purchase, but it is very important. In this article, we will go over some of the reasons for vehicle gap insurance and why you may or may not need to purchase a gap policy. By learning this kind of basic information, you will have an edge when it comes time to look for online automobile insurance quotes and rates.

What is it?

Car gap insurance is only applicable to people that are leasing their vehicle. When you open a lease on a new vehicle purchase, you will be making monthly payments plus interest to the dealer. After time, you will pay back the total value of the car. The problem arises when your automobile is damaged or totaled and the amount that you owe on the lease is higher than the amount that is paid by the insurer. The gap policy will pay for the difference between the two amounts. Lets take a look at a quick example that may help you understand this concept and how automobile gap insurance works.

Say you purchase a new automobile for $20,000 from a dealer and you start making payments on the car. Soon after, you are involved in an accident and the automobile is totaled. The insurance company does an estimation and determines that the vehicle was worth only $15,000 at the time of the accident. They pay out the $15,000 and you still owe $5000 to the insurer. With an auto gap insurance plan, the gap policy will pay for the extra $5000 dollars that you still owe to the dealer. With the right auto gap insurance policy, you will be able to save a lot of money that you would otherwise need to pay out of pocket.

If you decide to lease your automobile, you will want to look into purchasing a gap policy. However, in some circumstances people do not need to buy one of these plans. In the following circumstances, you may not need to worry about buying a plan that will pay the difference between the amount that you owe and the amount that is settled in your claim.

In some lease agreements, there exists what is commonly known as a gap waiver. With this type of waiver, you will be protected from the gap charges if the automobile is declared a total loss by the insurance company. If this type of waiver is included in your lease, you will not need to purchase one of these specialized policies.

Some automobile policies already have automobile gap insurance included in the basic plan. Look over your existing plan and see if the full amount of your financed vehicle is covered. If it is covered, you will not need to purchase additional coverage for your vehicle.

Locating Great Prices

When you start looking for one of these types of policies, it is important that you take the time to compare the different providers. Some of the better options on the market will be willing to offer lower auto insurance quotes than others. By doing the appropriate research and comparing car insurance rates, you will find that you are able to save hundreds of dollars on your annual premium rates. Some companies will be willing to give you discounts for a number of different reasons. Also, if you are willing to take on a deductible, you may find that your rates are going to be much lower. Automobile drivers that have a higher deductible are much less likely to submit claims and will be much more attractive customers to insurers.

With a small bit of research anyone in the country can quickly find the very best automobile gap insurance. If you are leasing your vehicle, you likely do not have the extra money to pay the dealer if your car is totaled. Do your best to get the coverage that you need, and you will be able to drive with the confidence you need. Use the tips that we have provided and within minutes you can purchase a perfect policy.


Enter Zip Code

Get the Lowest

Quote in 3 Minutes

McAfee SECURE sites help keep you safe from identity theft, credit card fraud, spyware, spam, viruses and online scams