Gap Insurance
Candlefocus EditorGap insurance is an important type of auto insurance that is often overlooked. This type of insurance is normally used for new vehicles, or when financing a car. It can also help a car owner in the aftermath of an accident, fire, or theft. Though it can be an expensive add-on, it offers substantial protection in certain situations.
Let's say a customer purchases a new car. They put down a significant down payment, and take out a loan for the rest. However, if said car were to be totaled in an accident or stolen, the insurance company wouldn't be responsible for paying the loan back in full. This could leave the car owner stranded, as they would not have the money to pay off the auto loan.
Gap insurance solves that problem by ensuring that the auto loan is paid off even after the vehicle is totaled or stolen. It's important to note that gap insurance does not provide coverage for the car itself, simply the loan payment. In most cases, the customer will be able to use the payout from the insurance company to purchase a new car and still make the loan payment without any extra financial burden.
For those who are unsure of their coverage needs, it's best to consult a professional auto insurance agent. They will be able to assess the customer's specific needs, weigh the cost of gap insurance against the customer's risk factors, and make a recommendation.
At the end of the day, gap insurance is an important form of protection that can save car owners from financial disaster. It's an additional form of insurance that, when used properly, can provide vital protection in a variety of scenarios. For anyone who is considering a car purchase or loan, it is important to assess the potential need for gap insurance and make an informed decision.