This article will talk about gap insurance: what it is, why you need it, and what situations will you need it for. If you got into a significant automobile accident, or if your automobile gets taken, gap car insurance could save you thousands of dollars. Gap insurance is also called "totaled or stolen" automobile insurance. This type of insurance settles the difference between what your car insurance company pays in case your car is totaled or stolen, and the payoff balance of your auto loan.
You should be wary of some insurance firms that will "lowball" even their own clients when it is time to total out a vehicle. An appraiser will assess the depreciation of your car, but he may not give you the real value for it. Gap insurance is one of the major ways you can get some piece of mind. It will ensure that you get all of the cash you are entitled to collect.
For leased vehicles, a leasing company will need you to buy gap insurance. If surpassing the mileage in your lease term, a car may have a lower price at the end of its lease term. Many corporations will permit you to buy Gap coverage any time in this lease period. For new automobiles, if you are putting twenty percent or more as a down payment on the vehicle, you may not need gap coverage. Many insurance companies will enable you to buy coverage if the used car is less than two years of age.
You may find yourself “underwater”, owing thousands more than the value of a car. This frequently occurs when someone trades in an automobile and owes more than the value of the automobile he is trading in. Finance companies will let you add the balance of this trade-in to the backed quantity of your new auto loan. If this happens and you do not have gap coverage or policy, then you might find yourself in deep financial trouble.
Keep in mind that most insurers will need you to have Collision and Total coverage in order for gap coverage to apply. Most insurers will also need you to resume making auto payments until the cover pays its benefits. You can shop for this type of insurance through assorted automobile insurers. Contact your own insurance company to determine if they offer it.
Another way to find companies that offer gap car insurance is by searching online. Take time to compare different insurance firms, this will save you time and money in the future.