Most car owners and drivers are unaware that they need GAP insurance in their auto policies. When an insured vehicle gets into an accident a few months after its purchase, an owner would still have to pay for additional expenses even though he already has full coverage auto insurance. Why?
For instance, you bought a car for $35,000 two or three months ago. You have made 3 payments at about six percent interest rate. Then, the unexpected happens, you meet an accident and your car gets totaled. When you spoke to your insurance company the vehicle is now only worth $25,000 which is the amount they would pay as your claim. On the other hand, your car dealer says they need you to pay the full amount of the car. What would you do?
If you have GAP insurance, there would not be any problem because it will pay the extra $10,000 to the car dealer. However, if you do not have GAP coverage, you have to pay the said amount for a vehicle that you do not own anymore. Which of the two scenarios would you choose?
All car owners need assurance in the protection of their vehicles and finances. Unfortunately, that assurance is lacking when they only get auto insurance. As a smart automobile owner, purchase GAP insurance for additional support in case something unfortunate happens. If you are now planning to apply, here are some guidelines:
- Before getting GAP policy, make sure to have already purchased collision or comprehensive coverage. If you did not get collision coverage, GAP coverage would not be sufficient to handle all the expenses. It is only an additional policy.
- Do not get GAP once your vehicle is above 12 months old. The longer time you wait before getting this policy, the fewer your reasons of buying it. After 12 months, the value of your vehicle is more or less equal to the amount you paid for it.
- Ask an insurance agent for assistance. Get the services of an insurance expert to determine whether you need this coverage or not.
- Apply for GAP insurance in another company. Usually, GAP coverage premiums are higher when they are offered by your auto dealer or insurance company. Try to search online for independent insurers who specialize in providing this auto coverage.
Nowadays, security is usually more important than wealth because you will have fewer worries. By paying a few more dollars on your GAP policy, you can obtain security and peace of mind which money definitely cannot buy.