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What is Gap Insurance?

buying car

When you buy a new car there are certain kinds of insurance you’re required to have in Lexington. Liability insurance, which covers the other driver if you’re at fault in an accident, is legally required in most places. If you finance your vehicle, the lender might require full-coverage insurance. But what is gap insurance on a car? Is gap insurance worth it? Learn more about how gap insurance covers the difference between what your car is worth and what you still owe with Dan Cummins Chrysler Dodge Jeep RAM of Paris. 

What is Gap Protection?

What is gap insurance on a car? It’s meant to cover total loss in the event of an accident. Though it is an optional coverage, it is worth talking with your insurance company about what it offers you. Gap insurance covers damage to your vehicle if it’s totalled and you haven’t paid off your financing yet. Otherwise, you’d be stuck paying for a car you no longer have. It doesn’t cover bodily injuries; those are covered by liability insurance. Here’s a list of what gap protection is for Georgetown drivers: 

Gap Insurance Covers:

  • Theft
  • Fire
  • Vandalism
  • Accident
  • Acts of nature (tornado, hurricane, flood, etc.)

Gap Insurance Does NOT Cover:

  • Deductible (though some gap insurance policies allow this)
  • Engine failures and other mechanical repairs/malfunctions
  • Death
  • Extended warranties

Engine failures and mechanical repairs are likely to be covered by your warranty. 

Is Gap Insurance Worth It? 

With low rates that can be bundled into your auto financing, is gap insurance worth it? Absolutely! While it’s an optional coverage, gap insurance is helpful if your dealership offers a plan that includes deductible coverage. This insurance will give you peace of mind that, in the event of an accident, your financial losses will be lessened. Considering the rates of depreciation on new cars, purchasing gap insurance is a smart investment. 

Let Our Finance Department Answer Your Insurance Questions

At Dan Cummins Chrysler Dodge Jeep RAM of Paris our finance department is here to help you save money in every way when you purchase a new car. If you want to know more about what is gap insurance, contact us today and we’ll provide you with all the information you need to make an informed decision.

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