A lot of insurance buyers neglect the need to buy gap insurance because they do not really understand what the policy entails. Most think that regular car insurance is more than enough to protect them from losses. When the time comes that they face the truth, they have already lost so much and all they can do is regret.
Gap insurance is a type of coverage that can cover the things that your regular auto insurance cannot cover. It is important to fully realize its meaning and context to appreciate its use.
Imagine that you have just bought a brand new car. It would not come as a surprise if you get too excited to insure it. You agree with your insurer to get comprehensive coverage even if it is going to cost you big amounts of cash. You drive around your beautiful car for three months thinking that it is in very good hands. The most unfortunate incident occurs – your car is totaled by theft, vandalism or weather. You get depressed for a while and then think that your insurer will pay for the price of your car, but you are wrong. If you bought or loaned a car for $40,000, you should not expect to be paid the same amount by your policy. An insurer will pay you the market value of your car, not the retail or acquisition value. It is very typical for cars to be priced thirty percent less than the purchase price in just three months. If you lose your car without gap insurance, you are to say goodbye to $12,000. That is a big amount of cash you do not want to lose just like that.
If you have gap insurance for your vehicle, you should not worry about the $12,000 anymore since this will be paid by an insurer. If you lease the car, you no longer have to worry about not being able to pay the remaining balances of the lease contract.
This insurance policy is generally not covered in regular vehicle insurance. It is an add-on option that you may include in your coverage. Nevertheless, it can be purchased separately if your present insurer is not offering such coverage.
Now that you have understood what this type of insurance entails, it is high time to decide whether you are going to avail of this policy or not. Put in mind that your car is a prized possession; you must act in all matters to protect it from damage, theft or loss. Getting coverage for it is the start.