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What is Gap Insurance?

from Lamplighter Insurance
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by Ryan Sussman on Nov 06, 2015

Purchasing a new car is the kind of experience that not all people have the pleasure of enjoying.You worked hard to save the money, build your income, and took the “leap of faith” to finance it. You sign the mountains of paperwork to allow a dealer to get your tags, registration, and financing. You call your insurance agent and even had it added to your policy to assure that your new investment is protected. Your insurance policy possibly allows for automatic coverage for the newly acquired vehicle.

On your way home from the dealership, your unfamiliarity with the vehicle causes you to lose control and destroys your new car. Fortunately, you are not injured but your pride and joy is deemed a total loss due to the severity of the damage. What happens next?

Insurance covers the ACV (Actual Cash Value) of the vehicle less your deductible.

ACV (Actual Cash Value) = Replacement Cost – Depreciation

$32,000 Your Loan

-$27,000 ACV (Actual Cash Value) of the vehicle paid by insurance (including deductible)

$5000

If you have purchased GAP Insurance to “fill the gap” between the amount owed and the amount paid by your Insurance, then the additional $5000 will be paid by your insurance carrier.

If you have NOT purchased GAP Insurance, you will be responsible for paying the $5000 out of pocket.

Typical cost of GAP Insurance is $35-$100 per year (depending on risk characteristics of your policy including:credit, driving history, and vehicle type.)

Call Us Today to get a quote on your Car Insurance including GAP coverage.

(803) 451-0076

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