If you have gap insurance and you are in an accident, you may be able to file a claim with your insurance company to help pay off your loan or lease.
What is GAP insurance?
GAP stands for Guaranteed Asset Protection, this is an optional car insurance extra. Gap insurance is designed to cover the difference between what you owe on your loan or lease and what your car is worth, up to the limit of your policy. It’s really important that you buy GAP insurance due your car loses its ACV immediately after leaving the dealership.
Let’s put this example:
You go to your bank and you request a loan to buy your new car, then you go to your dealership address, pay for your new car, then you drive back home, and you suffer an accident, and your car is totaled. As your car is under a loan, your car insurance won’t cover your totaled car, yet you will have to pay your car loan.
This is the reason why your GAP insurance covers your loan, meanwhile, your car insurance will cover the damage caused to your car during this accident.
What covers GAP insurance?
All GAP insurance policies cover: Fire, flood, theft, accidents, tornado, and vandalism
All CAP insurance policies do not cover: The repair of your car, the cost of your rental car, downpayment of a new car, debts due to financial hardship, extended car warranties for used or new cars, or the reduced value of your vehicle after the crash.
How can you file a GAP insurance claim?
Filing a GAP claim is not that hard, you only need to gather the following documents before filing your claim:
Your original purchase document
The payment history report from your lienholder
The GAP insurance policy contract
The copy of the policy report
The file of your ACwas V issued by the insurance company
Once you have all these documents, you only have to contact your GAP insurance company, they will ask you some questions, and you must answer all their questions. Then, you will have to explain all the detailed issues. Your insurance will give you some instructions, just follow these instructions.
Conclusion
If you have comprehensive collision coverage on your car, you may already have some coverage for gap insurance. Check with your car insurer to see if you have coverage and how much it would pay in the event of a total loss.
Remember to prepare all the documentation listed above before starting to file your claim.
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