What Does Gap Insurance Do?
When you buy a new car for yourself or your business in Northern Chicago, it’s required that you insure the vehicle. However, there are also some optional insurance coverages available. One of these is gap insurance, but what does gap insurance do? And what does gap insurance cover? Essentially, gap insurance is designed to cover the “gap” between how much you still owe on the vehicle and the true cash value of the vehicle in the case of an accident. Learn more below.
What Does Gap Insurance Cover?
Like we said, gap insurance covers the gap between how much you owe on a vehicle and its cash value in the case of an accident or total loss. This way, if your car is totaled, stolen, or destroyed somehow in Milwaukee, you won’t be left in the lurch. One thing to keep in mind is that gap insurance only covers your vehicle, not property damage or bodily injury. If you’re still asking, “what does gap insurance cover?” here’s a clear list:
Gap Insurance Covers:
- 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
- Extended warranties
Gap insurance is optional, but when you consider the answer to “what does gap insurance do?” you’ll see that it’s meant to protect you in the event of an accident when you still owe a significant amount on your vehicle. Talk with your insurance company to see if this might be a good idea for you.
Should I Get Gap Insurance?
It depends. When you’ve purchased a new car in Racine or elsewhere, gap insurance can be especially helpful if your insurer offers a plan that includes deductible coverage. Getting gap insurance gives you peace of mind, and helps you save money if there is an accident. If you’ve already mostly paid off your car, then you probably won’t need gap insurance. Our financing team can give you advice for your specific situation.
Lynch Truck Center Can Help With Your Finance Questions
If you have any other questions about gap insurance or financing a vehicle for personal use or for your business, please contact us. Our finance team in Waterford will be happy to help.
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