What Is Gap Insurance And Who Needs It

There are so many things that you can get an insurance Carlisle PA for. If you really want to, you can get covered for almost any asset that you have. That’s why it’s always confusing when you hear another term under the umbrella of insurance.

You may have heard about gap insurance from your insurance company or from an agent. What is it and how can it help you? Will you need it? Below are some of the things that you should take note of if you are weighing whether gap insurance is something that you will need in the long run.

What is gap insurance?

Gap insurance is what covers the gap between the time when your insurance company pays out the money you owe on the car loan in the event that it is considered a total loss.

When you buy a car, it’s important to remember that the retail price isn’t going to be the exact resale value. That means it’s almost impossible to get back the equal worth of your money. This is also the case if you financed your car because of the additional costs on your loan. The sales tax and other fees you have to pay all come into play.

When the vehicle gets destroyed, gap insurance will cover the depreciation, especially in a car with a high rate of it. This can help you in the long run because a car’s value almost always goes down. It’s impossible, nowadays, to find a car that increases in value especially in stock condition.

If you have your vehicle financed for at least 4 years, the gap insurance will cover you by providing you additional protection in the event of a total loss. If your car is completely lost, the loan-to-value ratio will be narrowed at a pace comparable, if not better, than a short-term loan.

Will gap insurance cover theft?

A common misconception about gap insurance is that it won’t cover theft. While some comprehensive insurance policies do cover theft, gap insurance can and does cover it as well. If your car is stolen and is never recovered, it will be covered by your gap insurance. Talk to your auto insurance agent and ask whether which one provides you with the more flexible choices.

Do you need gap insurance?

There are some certain guidelines that most people follow when considering gap insurance:

Was there less than 20% down payment made?

Has the vehicle been financed for at least 60 months?

Was the vehicle purchased one that depreciates faster than the average model?

Is the vehicle leased?

Is there a rolled over negative equity into the new loan coming from the loan of an old car?

Above are some questions that you should ask when considering whether you need gap insurance. Knowing if there are any auto insurance policy changes will also help in deciding whether you need this specific insurance Carlisle PA. It will be easier to make a decision if you figure out the specifics.

Miller Carlisle Insurance Services has partnered with the best insurance Carlisle PA companies to help safeguard yourself, your family, your home, your business, and practically everything important to you. Contact us today

Leave a Reply

Your email address will not be published. Required fields are marked *