If you as a motorist have gap car insurance coverage or gap coverage, you should know what the qualifying situations are where in your gap coverage can be applied or not.
But before discussing those situations, let us first know what gap car insurance coverage or gap coverage is. Gap coverage is an optional coverage that can be added in a policy holder’s car insurance policy for additional protection and peace of mind. It [gap coverage] does give protection and peace of mind because it pays for the difference in amount between the actual cash value [ACV] of the car and the amount the will be paid by the car insurance company. This difference in amount is known as ‘gap amount’.
Thus gap coverage takes into effect in cases where the car of a policy holder is obtained through a loan and that loan is not yet settled by the policy holder. he gap car insurance will pay for the gap amount, or the difference in amount of the actual cash value of the car and the amount that will be paid by the car insurance company, under Collision coverage or Comprehensive Coverage, depending on how the cars was totaled.
Does that mean that gap coverage can’t be used in other situations?
The answer is of course yes. So if in case a policy holder of gap car insurance coverage got involved in a car accident, regardless of whose fault is it, and the car of that policy holder is damaged but not deemed as a total wreck or totaled, that same policy holder for gap coverage won’t be able to claim for any reimbursement from the car insurance company for any money used on the car repairs.
Even if that same policy holder has gap car insurance coverage as the only form of car insurance for his/her car or property that he/she has, and also if the driver, perhaps at fault, is also not insured, the policy holder of gap car insurance would still not be able to claim from the car insurance company that provides his/her gap coverage for any reimbursement for the money spend o the car’s repairs.
It is best to always study all the items stipulated in your car insurance coverage. You have to ask your auto insurance agents all the questions for you to deeply understand the intricate details of your policy. This way, you will know what to do when the time comes.