Loan/Lease Gap Coverage

How Can You Cover the Gap?

 You just bought your dream car 6 months ago. You have been oh so careful. No one is allowed to eat or drink in your car. You stop fully at every stop sign. You stat a full car length behind every car you drive behind. Until one day you don’t stop at the stop sign.

Your dream car is totaled. Then you find out that not only is your dream car gone, but the insurance isn’t going to cover the full amount you owe on your loan. They say something about not having Gap insurance. What is that? Why would I have had it? How can I get it? How much will it cost me? We can explain that!

Want a better scenario?

   When you buy a new car, many carriers (and dealerships!) offer Loan or Lease Gap coverage as an optional coverage. With this coverage, if you have a total loss, you are covered for the difference in the your now totaled cars value and what you owe on the loan.  The market value for your car isn't necessarily the same amount as what you owe on your car loan. Carriers pay out Actual Cash Value on your car, unless it is a certified classic automobile or you have a special policy that pays a specified amount for the car. Usually the adjuster will use the Market value of your car, at the age it is and the shape it is in. One way you can decide if the Gap coverage is worth the premium, is to ask yourself if you can pay off that loan difference out of pocket?

Where can you get Loan Gap coverage?

      When you buy a brand new car, the dealership will usually offer you this coverage. Before you take it, call your insurance agent. (You need to call them anyway to add your new car!) They should offer the Gap coverage to you, but if they don't, ask about it. It is usually inexpensive to add this optional coverage. I just added the coverage to a policy yesterday and it only added $17 annually. That is a great price to save you possibly thousands down the road. It is important to note that most carriers I know offer this coverage on cars less than 2 years old. Some may go up to 3 years, but that is it. It isn't worth it for the carrier to offer to pay out on older cars. If you have Gap coverage on your policy, the carrier will drop it at the renewal once a car is over their allotted age. You will want to look for it on your renewal. 

What about Lease Gap coverage?

   If you are leasing a car, ask if your contract includes this coverage. Many do, which is convenient! If not, most carriers offer the coverage on lease cars also. Keep in mind, this coverage only applies in the case of a total loss.  As always, it is up to you whether or not you add optional coverage. Take a look at the premium vs. the gap and decide which one you can live with. The same basic guidelines apply to Lease Gap coverage as for Loan Gap coverage.

There are three ways to request a quote for your insurance needs: 

* Visit our website

* Email us

* Call Brockman Premier Insurance at 877-987-8683