GAP INSURANCE:
GAP stands for Guaranteed Asset Project.
GAP insurance protects you against financial loss if your vehicle proclaimed a total loss or write-off by your car insurance provider.
Is gap insurance worth it?
Gap insurance may be worth it if:
• if you made small payment on a new car or none at all.
• If you bought a car that depreciates more than average.
• If you drive a lot which reduces car value .
• If the car loan has a length of five years.
• If the loan has a high-Interest rate
• If you owe more on your car loan than the vehicle is worth.
• If you have little or no life insurance, than it worth it to you.
• And it is the most important point to know that the Gap insurance can help you pay your car finance if your car is written of or stolen
you might end up owing more than the value of your car:
• if you are paying the debt off slowly.
• If the initial loan term was short.
• the down payment for your finance deal was very small.
• It depends on which type or kind of car you have purchased, if it loses value quickly than it will be no longer worthy.
• If you are paying a lot of interest.
When to consider gap insurance?
- It is also a good option for following type of drivers:
• drivers who owe more on their car loans than the car is worth. If you are making car loan payments , be very sure to calculate the loan balance and weight it against your car’s current cash. (This is totally different from the amount you paid for the car) If there is any gap you should consider gap insurance.
• Drivers whose car loan requires gap insurance. regardless of what you owe on your loan, some loan providers require gap insurance from the starting point of your loan.
• Drivers whose lease requires gap insurance . Many leases requires gap insurance as a protective measure.
- if you are making a down payment of more than 25 percent on your next vehicle, or if your insurance policy will replace your car if its proclaimed a little or more loss in the starting few years of ownership you have little use for gap insurance.
How to get gap insurance?
You don’t have to buy the gap insurance at car dealership because you can’t buy it any time. Some insurers require you to be the true owner of the vehicle.
You can buy a gap insurance through:
• Your car dealer may offer to sell you gap insurance on your new vehicle.
• however many car insurers also offer you to get it and they typically charge you less than the dealer.
• your auto insurance provider which can add the additional policy to your account.
• A company specializing in selling gap insurance.
• An independent insurance agent
however, it is usually best to avoid purchasing this insurance from the dealership where you purchased your car. Because they can quoted rate almost 4 times greater than the typical rates.
Can you get refund on gap insurance?
• You may cancel the gap insurance policy within the 30 days of policy purchase date and obtain a complete refund by contacting direct gap.
• A gap refund may be issued for any unearned portion of the coverage because a gap insurance is often paid upfront at the dealership or with your lender.
• However, if you pay coverage in monthly installments , you are not entitled to any refund.
• Be sure to get a refund:
• after a vehicle is paid off, any unearned premium is refunded to the the insured. For example, if a vehicle is financed for 24 months and it is only paid off in the 12 months, one year premium charges are due back to the insured as gap coverage is normally paid in advance
• gap insurance only applies to your loan length, once you pay off your loan , you no longer need this particular coverage.
• The premium for gap insurance is usually paid up front or financed into loan but remember if you sell the car before the term of your loan has expired, you should received a refund. Even though you paid your gap insurance premium up front,the amount is still prorated over the life time of the loan.
• If you are using your gap insurance to pay off your lender because of a total loss of accident, than you may be wondering if the rest of your gap coverage premiums maybe refundable
• you may be eligible for a gap insurance refund if you pay off your car early.
• Which companies offer gap insurance and at which cost?
Mostly car insurance companies offer gap insurance, though many have certain limitations on which they will insures vehicle.
There are so many companies offering the same gap insurance, while there are several criteria for rating providers of gap insurance coverage, those criteria that include price, confidence, qualityPreformatted text, customer service and availability of a variety of coverage options.
| Insurer | Does it offer gap insurance | Limitations |
|---|---|---|
| State Farm | YES | Only vehicles financed through State Farm |
| USAA | YES | Only vehicles financed with USAA loans |
| Traveler | YES | New type of vehicles only |
| Allstate | YES | New type of vehicles only. |
| Progressive | YES | Upto 25 percent of cash value (lease or loan coverage). |
| Esurance | YES | Upto 25 percent of cash value (lease or loan coverage). |
| 21 centry | YES | Only available in AZ, CO, ID,OR, NE, UT, TN, NM, MT, ■■, WA and WI |
| Nationwide | YES | ---- |
| Farmers | YES | New type of vehicles only |
| GEICO | NO | ---- |