GAP Coverage
If your vehicle is declared a total loss, your auto insurance may only pay the vehicle’s actual cash value at the time of the loss. If you still owe more on your loan than the insurance settlement pays, GAP coverage may help with that difference. It is designed to provide added financial protection for customers who finance their vehicles and want more peace of mind.
What GAP Coverage Does
GAP stands for Guaranteed Asset Protection. It is designed to help if your vehicle is totaled or stolen and your insurance company’s settlement does not fully satisfy your remaining loan balance.
Helps with Loan Balance Differences
If your insurance settlement is less than what you still owe, GAP coverage may help reduce or eliminate that remaining balance, subject to the contract terms.
Protects Against Depreciation
Vehicles can lose value over time, and in some situations the loan balance may be higher than the vehicle’s value. GAP coverage helps address that risk.
Adds Financial Peace of Mind
GAP coverage can help protect you from having to make payments on a vehicle you no longer have after a covered total loss.
Why Customers Choose GAP Coverage
GAP coverage is often selected by customers who want added protection against the financial impact of a total loss, especially when financing a vehicle.
Useful for Financed Vehicles
When a vehicle is financed, there can be times when the payoff amount is greater than the insurance company’s valuation. GAP coverage is designed to help in that situation.
Helpful Early in the Loan Term
During the earlier stages of a loan, depreciation can outpace the reduction in your loan balance. GAP coverage can provide valuable protection during that time.
Important for Higher Loan Amounts
Customers who finance taxes, fees, service contracts, protection products, or have limited money down often choose GAP coverage for additional security.
Protection in a Major Loss Event
If your vehicle is stolen or declared a total loss, GAP coverage can help reduce the stress of dealing with the remaining balance after insurance pays.
How GAP Coverage Works
GAP coverage is designed to work alongside your primary auto insurance after a covered total loss has been determined.
Step 1
A covered total loss occurs and the claim is handled through your primary auto insurance carrier.
Step 2
Your insurance company determines the vehicle’s actual cash value and issues its settlement based on the policy terms.
Step 3
If there is a remaining deficiency between the insurance settlement and your loan payoff, GAP coverage may help with that amount based on contract terms.
Step 4
The remaining balance is reviewed under the GAP agreement and processed according to the terms, conditions, and limitations of the contract.
What GAP Coverage May Help With
Exact benefits vary by agreement, but GAP coverage is generally designed to address a remaining loan balance after a covered total loss when insurance alone is not enough.
Remaining Loan Deficiency
GAP coverage may help pay the difference between the insurance settlement and the remaining balance owed on the loan, subject to contract terms.
Greater Financial Stability
Customers often choose GAP coverage to avoid facing a remaining loan obligation after losing their vehicle in a covered event.
Common Questions About GAP Coverage
Is GAP the same as auto insurance?
No. GAP coverage is not a replacement for auto insurance. It is designed to work with your primary insurance after a covered total loss.
Does GAP cover mechanical repairs?
No. GAP coverage is focused on a remaining loan balance after a covered total loss. Mechanical repair coverage is separate.
Who should consider GAP coverage?
Customers financing a vehicle often consider GAP coverage, especially when they want added protection against depreciation and loan balance exposure.
Can I learn which option fits my vehicle?
Yes. Our team can review your financing situation and help you understand whether GAP coverage makes sense for your vehicle and loan structure.
Talk With Our Team About GAP Coverage
We can help you understand how GAP coverage works, explain available options, and help you choose the protection that fits your vehicle and financing needs.