Gap Insurance Coverage – Facts

When you decide you need gap insurance for your new vehicle, it is worth knowing what actually is covered and if you are going to get any additional value. Most gap insurance schemes will provide you with the difference between the car’s value and what the insurance company will pay in case your vehicle becomes a write off due to theft, fire, vandalism, accident, floods or acts of god. While buying a gap insurance policy, it is worth checking at any time if the coverage is extended by something else – as times change and new dangers appears, some insurers include additional circumstances within the coverage. Additionally, most gap insurance policies will also cover any insurance deductibles. Now that you know what is protected, it is significant to be aware as well, what is not.

Follow up:

There are around five common exclusions with gap insurance. First of all, your car needs to be covered by both comprehensive and collision insurances otherwise the gap insurance does not apply. Next, any equipment on the car which is not factory-installed is out of scope. Financially, costs for any other products added to the loan or lease such as extended warranties, as well as unpaid or overdue lease or loan payments, are excluded from the insurance coverage. Also if you have any financial penalties or security deposits on the vehicle you have on lease – the Gap will not take them into account. In conclusion, it is good to know what you have protected and what not when you sign a policy - and then need to lodge a claim.