Is Gap Insurance Worth It?
If you totaled your car in an accident would your insurance completely pay off the loan? “Yes!” You might think, like so many other Cape Coral drivers, “I have full coverage!” Not so fast. What if the car is now worth less than the amount left on the loan? Will the insurance cover that? That’s where gap insurance comes in. What is gap insurance on a car? Is gap insurance worth it? What is gap protection used for? Our finance department wants you to be fully informed so that you can have adequate coverage. So, we answer those questions below, and help you understand if you need this kind of policy.
What is Gap Insurance on a Car?
What is gap protection? To understand that, it’s important to understand what “full coverage” insurance covers. What a lot of people call “full coverage” refers to a combination of comprehensive and collision insurance. Comprehensive insurance covers the full market value of your car at the time of the accident. Normally, you would be responsible to pay the difference or “gap” between the vehicle’s market value and what you still owe on it. So, what is Gap insurance on a car used for? A gap protection policy will pay that difference or “gap” under certain circumstances
What is Gap Protection Able to Cover?
Gap insurance will kick in when your car is totaled by the following:
- Theft
- Fire
- Vandalism
- A traffic accident
- A natural disaster (or “act of God”)
Is Gap Insurance Worth It?
So, is Gap insurance worth it? We recommend gap insurance to Naples drivers when the following applies:
- Your car is leased
- The down payment on your loan was less than 20%
- Your loan was for 5 years or longer
- Your latest loan includes the payoff amount of an older loan
Do You Have More Questions? Let Val Ward Cadillac Help!
The finance department at Val Ward Cadillac in Fort Myers can help you understand the terms of your loan, which will help you decide if you need Gap coverage on your new or used car. We’re located conveniently near Bonita Springs. So come in for a test drive or contact us today!
