What You Should Know About Gap Insurance and Your Requirements

What You Should Know About Gap Insurance and Your Requirements

What to know about gap insurance for your car.

When it comes to insuring your car, you are probably familiar with standard coverages like liability, collision, and comprehensive.  However, there are other types of auto insurance in East Elmhurst, New York that you might not be familiar with.  For instance, most car owners do not know what gap insurance is, what it does, or whether they need it.  To ensure that you make informed car coverage decisions, here’s what you need to know about auto gap coverage.

  • What is Gap Insurance?

Gap insurance offers coverage that makes up for the difference between how much you owe on your car and how much it is actually worth at the time of a total loss accident.

  • Do I Need Gap Insurance?

Unlike other forms of auto insurance, gap insurance is not mandatory.  However, there are many benefits to carrying this coverage.  Gap insurance is most useful when the amount of money you owe on your car is more than what the car is actually worth.  In the event of a total loss, your insurer will only offer enough coverage to address your car’s current value.  This leaves you financially responsible for paying back the remainder of what you owe.  At this point, your gap insurance will kick in and cover what your total loss claim will not.

  • Understand Your Gap Insurance Rights

Gap insurance is recommended for leased vehicles and brand-new cars that depreciate very quickly.  Oftentimes, many auto lenders automatically include a clause that charges you for gap insurance.  If you do not want this coverage or already have this coverage through your insurance provider, then you have the right to refuse your lender’s gap coverage.  Make sure that you look through your loan contract carefully to see if you are being charged for gap coverage.  If you are, then make sure you tell your lender that you do not want this coverage.  Do not sign your leasing contract until you are sure that your lender has complied with your wishes.

This is what you need to know about gap insurance and your rights.  Do you have additional questions regarding your auto insurance in East Elmhurst, New York?  If so, then contact the experts at 01 Insurance.  We are ready to assist you with all your car coverage needs today.