Car insurance policies are not applicable in purchased cars; it is also available and is an advised investment even among leased and loaned cars. Leased and loaned cars are those cars which have not been fully paid or still in the progress of being paid. It is more risky because if accidents or unpleasant events happen the individual who made the loan will be stuck with two additional debts, for the car and other driver. The owner of a leased or loaned car who has no insurance policy will have to personally deal with the company where he loaned or leased the car. While doing so, the individual should also make compromises with the financial losses of the other driver, considering that at least two parties where involved. Either way the individual who owns a leased or loaned car will have to shell out his personal finances to make compromises with his current situation.
GAP car insurance a preferred choice when it comes to similar situations; it is the type of insurance that protects not only the car but also the lease or loan of the car. This type of insurance is mostly advised to those who are still in the early years of their lease or loan. This insurance will pay for the difference on the actual cash value of the vehicle and on the current outstanding balance on your lease or loan. On occasion this type of insurance will also pay for the policy holders’ insurance deductible. The GAP in this type of insurance is the differential amount between the insurance deductible and on the policy holders’ current financial downfall. If a vehicle is totaled through man caused accidents like collision, theft or even through natural calamities such as flood, fire or hurricane the current insurance company of the policy holder would most likely pay for the actual cash value of the car. This actual cash value can be lesser than its actual retail value, so the policy holder is paying more than the car is really worth.
The difference between the actual cash value and the actual retail value of the car will be covered by this type of insurance even if a collision or comprehensive insurance is also applied for. GAP insurance will safeguard the monetary situation of the car even in the event that it is totaled. This car insurance is usually available as an optional coverage that is also incorporated with physical damage insurance.