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What is Gap Insurance?

car insurance

When you’re looking to invest in a new vehicle for your Clarkston commutes, there is more to consider budget-wise than just the cost of the vehicle you’re interested in. You’ll also need to take the cost of insurance into account. Certain types of insurance, like liability insurance, are required of Waterford drivers, while others, like gap insurance, are optional. What is gap insurance, and is it worth the added cost? Learn more about gap insurance to determine if it’s a good option for you with Bowman Chevrolet, below!

What Does Gap Insurance Cover?

In the unfortunate event of an accident in Grand Blanc, gap insurance coverage would help to pay off any difference that may exist between what you still owe on your car and its actual cash value at the time of the accident. What other types of damage fall under the umbrella of gap insurance coverage? Take a look:

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

What Does Gap Insurance Do?

How does gap insurance work? For a greater understanding of how gap insurance can help you out, let’s look at a working example:

  • Imagine you bought a brand-new car for $35,000, and you still owe $25,000 on it. If the car were totaled in a covered accident, your collision coverage will only pay your lender up to the car’s depreciated value – let’s say that the depreciated value is $20,000. Without gap insurance, you would be responsible for paying the $5,000 difference out of pocket. With gap insurance, your insurance provider would help you pay that $5,000.

Do I Need Gap Insurance?

As we’ve discussed, you are not legally required to obtain gap insurance for your vehicle. In some cases, however, it is highly recommended for new car purchases. Many Clarkston drivers opt into gap insurance for the peace of mind it provides them, as it covers total loss in the event of an accident. As an optional type of coverage, it may be worth speaking with your current insurance provider to get a quote and determine whether you’d like to opt-in.

Learn More About Finance and Insurance Options at Bowman Chevrolet

Navigating your finance and insurance options as you shop for a new vehicle can be daunting, but the finance team at Bowman Chevrolet is here to make things easier for you. Whether you would like more info on gap insurance, you’re thinking about buying a car from another state, or you’re struggling to decide between buying vs. leasing, we’re here to provide car-buying information you can trust!

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