If you own a newer car and get in a wreck, gap insurance is something that you want to be sure you have! Gap insurance, also called loan/lease coverage, is an optional insurance that covers the difference between the balance of a loan, and what the insurance company is willing to pay if the car is considered a “covered total loss”.
Gap insurance is meant to be used along with collision coverage or comprehensive coverage. For example, say that you bought a new car for $30,000. You still owe $25,000 on your loan when you get in a wreck and the car is totaled in a covered collision. Your insurance company pays your lender up to the total depreciated value of the car. For this example, let’s say that amount is $20,000. If you don’t have gap insurance then you are responsible for paying the $5,000 difference between the depreciated value of the car and the amount outstanding on the loan. If you have gap insurance, then the difference would be covered.
Credit unions offer a lower rate on the purchase of gap insurance than that of a dealership. You can speak to your loan officer to as them about your need for gap insurance and receive a quick quote. Gap insurance! Another way we are Present for You!