How do I know if I have gap insurance?
To find out if you have gap insurance, check the terms of your lease or loan, your current auto insurance policy, or both. It’s a good idea to find out whether you already have gap insurance before you purchase more coverage because this sort of coverage is typically provided as optional coverage by insurers or as an extra add-on by dealers.
For those who have financed the purchase of their vehicle, gap insurance is a type of insurance that can be very helpful. It provides coverage in the event that the vehicle is totaled or stolen while the borrower is still making loan payments. If you’re a driver who bought a car in this way, you might be thinking, “How to tell if I have gap insurance.” Thankfully, there is a tonne of information available to help relieve your concerns.
Continue reading to find out if you are protected and to learn all there is to know about gap insurance.
Do You Know if You Have Gap Insurance?
I’m sure you had to go through a lot of paperwork when you first acquired your car. There were probably many figures on the printout you were given at the dealership, but you were most likely interested in the ones that indicated how much you would need to pay for the automobile on a monthly basis.
It’s true that you won’t be certain whether you have gap insurance without discussing it in detail at the dealership. Contacting the dealer or your insurer is currently the only way to be certain. They will have a record of this information.
What Is Gap Insurance for Cars?
Here is a brief description of how gap insurance functions.
Imagine you spent $35,000 on a car. When the car is totaled in an incident that is covered by insurance, you still owe $30,000. You will be compensated by your collision insurance up to the depreciated worth of the totaled vehicle. Say the amount is $28,000. Without gap insurance, you would be required to pay $2,000 out of pocket. However, the insurance provider will pay $2,000 if you have gap insurance.
If you’re wondering whether gap insurance is worthwhile, read on.
“Then keep in mind the widely recognised truth regarding auto valuation: As soon as you drive the car off the forecourt, it starts to lose value right away. Therefore, even if you have an accident during the first week of owning the automobile, the difference between the loan’s principal and the car’s present value will undoubtedly be sizable.
When Does Gap Insurance Not Pay Out?
If you’re leasing or financing your car, gap insurance may come in handy. Typically, you can receive a payout six weeks after filing a claim. There is a list of circumstances, nevertheless, in which it might not pay out; they depend on the provider among other things.
You will not receive a payout:
- if your primary insurance denies the claim. A failed sobriety test or irresponsible driving could be to blame for that.
- If the car is used for business reasons, such as a driving school or for hire,
- If you have stopped paying the premiums
- If you have already filed a claim with the same gap insurance
- in the absence of a “gap” to fill. A settlement from your auto insurance won’t affect your coverage if there is no difference between it and the price you originally paid.
Remember that the explanations can vary from insurer to insurer. The terms of GEICO gap insurance and Progressive gap insurance, for instance, will differ.
It’s possible that you are already aware of the exclusion factors if you obtained the loan on your own. You could also get in touch with the vendor.
Please be aware that although “full coverage” may sound like it would include everything, gap insurance nonetheless fulfils the same function. Therefore, you must purchase gap protection individually if you want to have it.
For GAP coverage, check your insurance statement.
If you’re unsure whether you have GAP insurance, ask yourself “How do you know?
“, consider whether you enquired about GAP insurance when you purchased the insurance for your car. You probably don’t have GAP insurance if you didn’t inquire. You should be able to check your vehicle purchase agreement or call your insurer if you’re not sure if you requested for GAP coverage or not.
However, don’t think you must purchase GAP insurance if you’re leasing or financing a car. A GAP Waiver Provision may be a part of a leasing or loan company’s agreement with a borrower or lessee. The “gap” between what you owe and what the insurance provider pays out will be covered by the GAP Waiver Provision.
Drivers in Toms River have the option to purchase gap insurance since it is not a mandatory policy. As a result, you’ll typically be able to tell if you have gap insurance just by recalling purchasing it.
If you chose to lease your current car rather than finance it, you might not be aware that you have gap insurance. It’s possible that your lease agreement required you to purchase gap insurance to guard against a total loss, but drivers frequently overlook this requirement.
Check for GAP Waiver Provision on Your Lease Agreement
Gap insurance isn’t always necessary whether you’re financing or leasing, however, some loan and leasing businesses will include a GAP Waiver Provision in their contracts. The best course of action if you’re still not sure if you have gap insurance is to contact your lender or leasing business. They will be able to inform you if a GAP Waiver Provision is included in your contract.