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What Savvy Consumers Need To Know About Gap Insurance


A lot of people think that their regular car insurance policy can provide them with comprehensive protection. Unfortunately, this is not the case and a lot of motorists can attest to the fact that most regular car premium policies are inadequate to cover expenses related to road accidents, stolen cars and the like. You see, most regular car insurance policies do not cover the difference between actual price of a car and remaining balance of the car loan.

For instance, if you still own $20,000.00 on your SUV and insurance company, after deducting the estimated depreciation cost of the SUV, value of vehicle at $18,000.00, you end up with a gap of $2,000.00 between actual price and estimated value. What does this mean? This means that when you lose your car, a regular insurance policy will only pay up to the amount stated in your policy and you end up paying the balance of car loans from your own pocket.

Since a regular insurance policy does not cover the gap between actual price and estimated value of the SUV, you could end up losing a lot of money when your car gets totaled or stolen. In other words, you get to pay for a car that does not exist! To avoid losing hard earned money, it is important to get an auto gap insurance policy. An auto gap insurance policy covers the difference between actual cost and estimated cost of a vehicle, so if you wreck your SUV, the regular insurance plus gap insurance policy will take care of everything.

Getting Insurance Coverage

Most car dealers around the country sell auto gap insurance coverage. Unfortunately, not all car dealers think that this type of insurance coverage is necessary, so many of them do not really take time to explain the nature of this insurance coverage to clients. In fact, a good number of car dealers around the country tell their clients that this type of car insurance is optional and they do not even bother to volunteer any relevant information about this coverage. As a wise customer, it is important to never let car dealers put you off from buying comprehensive auto insurance that bridges the gap between actual price and estimated price of your vehicle. If car dealers cannot give you a clear and comprehensive explanation regarding this type of auto insurance, do some independent research in this area. Remember that ignorance can be costly and if you are not careful, you can lose so much hard earned money.