GAP Insurance Coverage

What is a GAP policy? Many drivers are not even sure of what GAP insurance coverage includes, let alone how a GAP insurance cost calculator works. It is more important than ever these days to make sure you have the right amount of car insurance coverage to protect yourself as a driver on the open roads.

Problems can arise from legal and financial issues if you are involved in an accident and do not have the amount of car insurance you are required to have. If you are driving without insurance and have a wreck, your expenses will not be covered even if you are not the at-fault driver.

Calculate a GAP car insurance coverage quote using our FREE comparison tool! Just enter your ZIP code and click “Get It Calculated” to compare car insurance companies in your local area!

How much does GAP coverage cover?

A frequent question that’s asked is, “What is GAP insurance, and what does it cover?” Gap insurance covers the amount of a loan when your car is a total loss after an accident.

The easiest way to comprehend what GAP car insurance covers is to think of it this way.

If you owe on a car for $25,000 due to your loan payments, you may still find the car’s value at a lower amount. This is often very true of a car loan once you drive the vehicle off the lot.

The problem is the insurance you have, for it will only want to pay the value of the car in the event of a wreck. If the vehicle is worth $20,000 and you total the car, your standard car insurance policy will cover the value amount of $20,000. You will be left to pay the outstanding balance of $5,000.

That is the GAP. That is what auto GAP insurance coverage is for. A GAP insurance cost calculator will help you determine what you need.

Finally, let’s look at an example of how much you can spend on GAP insurance. Let’s compare the annual driving record rates and how GAP insurance affects them.

Driving Record Annual Rates with Gap Insurance Coverage

DRIVING RECORD AVERAGE ANNUAL RATES AVERAGE RATES WITH GAP INSURANCE
Clean Record $3,124 $3,824
With 1 Accident $4,100 $4,800.
With 1 DUI $4,920 $5,620
With 1 Speeding Violation $3,669 $4,369
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Of course, a clean driving record is the cheapest car insurance available. Any traffic violation, accident, or DUI will increase your car insurance rates considerably.

Your car insurance rate could be cheaper if you have good credit. According to the Federal Trade Commission, individuals with excellent or good credit are less risky than individuals with fair and poor credit.

You can decide to get stand-alone GAP insurance coverage with a finance company, which will add GAP insurance costs to your monthly payment.

Start comparing car insurance right by entering your ZIP code in the FREE comparison tool!

How do I know if I have GAP insurance?

In some instances, you may even be required by the financial lender of the car loan to cover this extra GAP insurance to make sure you are not short on your coverage amount. The basic idea is to insure the amount of the loan, not just the value of the car.

Watch this short video on how GAP insurance coverage works.

If the car is destroyed, the loan still exists and must be paid. The GAP insurance coverage pays for the difference in the amount between the total amount owed and the value of the car.

Talk to your GAP insurance provider to learn the details of your policy. If you have a standard car insurance policy, ask an agent if you have GAP insurance coverage. If not, perhaps stand-alone GAP insurance is an option.

Get a car insurance quote right now when you enter your ZIP code in the FREE comparison tool!

The Importance of Using an Auto Gap Insurance Calculator

When you finally determine what type of car insurance you need, you can get competitive quotes to make a wise choice about your policy. The GAP insurance cost calculator is one of the best tricks of the trade to get access to better rates.

According to the Massachusetts state government, all consumers have a right to pursue cost-efficiency, even in car insurance. The use of calculators or canceling car insurance is within your rights as a consumer.

Until this type of insurance GAP calculator existed, getting a GAP insurance price comparison was a tiring, tedious, and next-to-impossible task.

You would have to:

  • Look up car insurance companies in your area and their contact information.
  • Contact each of these companies personally either by phone or by driving to each office.
  • Give out all kinds of personal information again and again, which takes up so much of your time.
  • Wait patiently for each auto insurance policy provider to call you back, if they even bother.
  • Most of the time, you would have to still take out more time from your busy day to contact each agent who never bothered to call you back with the final results.

For that reason, drivers used to settle for bad premium rates by taking the first policy quotes that came along. It’s good to know you never have to go through all of that hard work to get your GAP car insurance policy rates.

You also never have to settle when it comes to the type of coverage you want or the rates you pay to get your coverage.

What the Car Gap Insurance Calculator Does for You

This is the best way to get peace of mind. You need to be a legal driver on the road. Getting different rates to compare to find an affordable GAP auto insurance policy will help make you a legal driver.

Not only that, but you can rest assured if you do wreck your financed car, you won’t be stuck paying the difference when it comes to your loan amount and the actual value of the vehicle.

The benefits of an auto insurance calculator also empower you as the driver and the consumer to not be stuck paying rates you cannot afford. While consumers have previously been at the mercy of the rates set in place by the policy, our site has changed all that by making providers compete for policyholders.

Gap Insurance Coverage FAQs

For the final section of this guide, we’ll go over a few frequently asked questions. If you want to calculate car insurance rates in your area, enter your ZIP code in the free calculation tool on the right side of the webpage.

#1 – What is a GAP policy?

A GAP policy covers a loan from a finance company when your car is totaled after an accident.

#2 – Where to buy GAP insurance?

You can buy GAP insurance coverage from a car insurance company or a stand-alone company.

#3 – Does Gap Insurance always pay out?

Yes. The GAP insurance coverage pays the lender the difference between the vehicle’s value.

#4 – What is GAP health insurance coverage?

Gap health insurance is a supplemental health plan that pays for medical costs before reaching the deductible.

#5 – Can I get GAP insurance from major car insurance companies?

Yes. State Farm, Allstate, Geico, and Progressive have GAP insurance attached to their full coverage car insurance policy. Gap insurance estimates may vary.

 

References:

  1. https://www.consumer.ftc.gov/articles/0152-credit-scores
  2. https://www.mass.gov/service-details/consumer-bill-of-rights