Gap insurance is usually for new cars that are still being financed. When a new vehicle is purchased and rolls off of the floor the actual cash value automatically drops. If your car is stolen or totaled with gap insurance the insurance company will cover what you purchased the car for. If you are financing a car the insurance will cover the total of the loan, helping you get back into a new car quickly.

Gap insurance is convenient because it will cover your entire loan making it easier to find another vehicle. Gathering information from your insurance company will give you more details on their policies and actions on gap insurance.

Gap insurance for older cars

Most insurance companies don’t insure older cars with gap insurance. This is because the car is not depreciating directly off of the floor. There are some companies, however, that will insure all vehicles with gap insurance. Check with your insurance company to see whether or not they provide gap insurance for your older model car. Some used car dealers will provide gap insurance for your loan as well.

That extra cost is usually a couple hundred dollars, well worth the coverage that you will be provided. Like all insurance you hope that you will never have to use it, but if something does occur gap insurance is there to cover you from disasters. Gap insurance will cover all of your finances for the loan.

If you were buying a new car applying for gap insurance to cover your new loan would be well worth the investment. Protect your loan with the proper coverage. If any drastic event would occur to your car gap insurance is there for coverage.