Before understanding what a Gap Coverage is, it is better to understand first what a “gap amount” is. A gap amount is the difference in amount on the original price of an automobile and the price that a car insurance company will pay for a policy holder’s car in case of a total loss. In other words, when a person loans for a car, the amount that a car insurance company will insure that car will be most likely be lesser than the original price of the car.
And when there is a gap amount there should be a Gap Coverage. Gap Coverage will insure for the gap between the original price of the car and the amount that the car insurance company will only insure, most likely under Comprehensive or Collision Coverage.
There are still other optional car insurance coverages, aside from these aforementioned coverages, and those other car insurance coverage can be optionally added, for additional peace on mind for the policy holder.