Your insurance agent might recommend that you take a gap car insurance. Before you say yes right away, it helps to understand what the converages really mean.
What gap car insurance covers
Simply put, a gap car insurance covers total losses due to any reasons. These could include theft, fire, vandalism, accidents, floods, tornados and hurricanes. This means that your gap car insurance pretty much covers any total loss your regular car comprehensive and collision insurance cover. At the same time, getting a gap car insurance will also cover your insurance deductible.
What gap car insurance does not cover
On the other hand, with all the things your gap car insurance covers, you may think that it is already the ultimate insurance for your car. Before anything else, there are still some things that the gap car insurance won’t cover you for. The following exclusions:
1. Cars that are not covered by both comprehensive and collision insurance C This means that you can only avail of gap insurance for your auto if you also get the two other insurances.
2. Any equipment on the car that was not factory installed C If you bought your new car and found out that it does not have anti-theft devices, installing your own devices and any other gadgets is a personal choice. However, if something happens to them, they are not covered by your gap car insurance.
3. Money that was “rolled” into the car loan C Also, the money you used for trade-in or lease will not be reimbursed or will not be covered. The gap car insurance will only completely cover the losses on new cars that were not leased or traded-in.
4. Costs for any other products added to the loan or lease such as extended warranties C This is like the previous one, the gap car insurance will only cover the market value of the car, no other costs included.
5. Unpaid or overdue lease or loan payments C If your new car was bought on lease or loan and you find difficulties handing over your payments on time or at all, you can’t expect your gap auto insurance to cover for you.
6. Financial penalties or security deposits on leased vehicles C Finally, if your new car is still on a lease, you have to independently handle the costs of financial penalties you might acquire and even security costs.
These are just the common exclusions and coverages of gap car insurance. It is still advised that you check with your insurance agents about the particular gap insurance you may want to have.
Before you get the auto insurance for your new car, be sure that you understand the things they cover and exclude. It’s best to contact your car insurance companies or your insurance agent for your queries. Also, before getting your car insured, compare insurance quotes online via Autoqutenow.com.