Gap insurance is an optional car insurance coverage that helps pay off your auto loan if your car is totaled or stolen and you owe more than the car’s depreciated value. Gap insurance helps pay the gap between the depreciated value of your car and what you still owe on the car.

Does Gap Insurance follow the car or the loan?

Calculating your gap insurance only requires taking the current value of your vehicle from the remaining balance of your loan. You should be able to consult your lender as to how much you still owe, and Kelley Blue Book is a good tool for finding your car’s value.

Can a GAP insurance policy cover a repossessed car?

Gap insurance offers no coverage for the money you owe on your car loan after repossession. The coverage offers financial protection for totaled vehicles when an insurance payoff does not cover a loan or lease amount. If your vehicle is repossessed, you must make arrangements to pay your remaining debt to avoid being sued by your lender.

What does it mean to have GAP insurance on your car?

Gap insurance is an optional car insurance coverage that helps pay off your auto loan if your car is totaled or stolen and you owe more than the car’s depreciated value. Gap insurance may also be called “loan/lease gap coverage.”.

Can a late car payment void my Gap policy?

Question: Is your gap insurance voided out if you are 30 days late with your car payment? Answer: No. Being late with your car payment won’t void out your gap insurance policy.

What to do if your car is stolen and you have GAP insurance?

If you need to file claims, including a gap insurance coverage claim, after having a vehicle stolen, expect it to take some time and be willing to follow along and be cooperative in the process. Make a police report as soon as possible. Get copies of the reports to submit to your insurance companies.