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What Does Gap Insurance Cover?

Insurance Agent Examining Car After Accident

 

Deciding on insurance for your new car purchase can be an overwhelming experience in and of itself, let alone when you start to come across all of the optional insurance plans available. In this process, Elk River drivers have likely encountered gap insurance, and without knowledge of what it is, it can often be overlooked. So what does gap insurance cover? What does gap insurance do? This guide from Cornerstone Ford should provide the information you need to make a knowledgeable decision on whether or not to procure gap insurance.

What Does Gap Insurance Cover?

Unlike liability insurance, gap insurance typically isn’t required by state law. However, it still proves useful in certain instances for Rogers drivers, especially early on in ownership. That’s because gap insurance covers total loss in the event of an accident, including the difference between what is owed on the car and the value of the car at the time of an accident. Here is a more detailed breakdown of what gap insurance covers:

  • Gap Insurance Covers:
    • Fire
    • Theft
    • Vandalism
    • Acts of nature (tornado, hurricane, flood, etc.)
    • Accident
  • Gap Insurance Does NOT Cover:
    • Deductible (though allowed by some gap insurance companies)
    • Engine failures and other mechanical repairs/malfunctions
    • Death
    • Extended warranties

Still asking yourself: What does gap insurance do? The Finance Department at Cornerstone Ford can assist as you determine what it can do for you.

Why Is Gap Insurance Important?

Gap insurance can save Anoka drivers quite a bit of money if they’re still paying off a car loan and find themselves with a completely totaled vehicle. That’s because if your car is determined as a total loss and you owe more than its value, your regular insurance won’t pay off the loan in full. That might leave you owing several thousand dollars on a car you can no longer drive. But that difference is what gap insurance covers.

Is Gap Insurance Necessary?

As previously mentioned, gap insurance isn’t required. However, as you explore your insurance and financing options, remember that gap insurance proves helpful for only certain drivers, such as those who have financed their vehicle and those who have leased their vehicle. If you own your car or you owe less than what it’s worth, gap insurance absolutely isn’t necessary.

Explore Your Insurance and Finance Options at Cornerstone Ford

Whether you’re ready to purchase a vehicle or just starting to look, it pays to have the knowledge about various insurance plans and financing options. Make sure you understand what each type of insurance entails before you buy, so that you can save time and money in the long run. Get in touch with Cornerstone Ford today for more advice!

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