What Does Gap Insurance Cover?

January 17th, 2019 by

Woman sitting in a car getting the keys dropped into her hand through the window
When you purchase a new car or participate in a trade in from Acura of Escondido, it means you can take advantage of various financing and insurance options. One of those options is called gap insurance. What does gap insurance do? It’s designed to cover the gap between the amount owed on the car and the true cash value of it at the time of trade-in. Learn more about gap insurance and how it can benefit San Diego area drivers.

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What Does Gap Insurance Cover?

Gap insurance, or Guaranteed Asset Protection insurance, covers multiple issues with your car. Temecula drivers should keep in mind, that it just covers the damage to the vehicle, and not the property or bodily injuries. Here is a guide of what gap insurance does and does not cover:

Gap Insurance Covers:

  • Accidents
  • Acts of nature (tornado, hurricane, flood, etc.)
  • Fire
  • Theft
  • Vandalism

Gap Insurance Does NOT Cover:

  • Death
  • Deductibles (though some gap insurance policies allow this)
  • Engine failures and other mechanical repairs/malfunctions
  • Extended warranties

But what does gap insurance do in terms of these situations? It will cover the total loss in the event an accident occurs. Even though this coverage is optional, it’s worth speaking with your insurance company about to find out whether it’s beneficial for you to get.

Do I Need Gap Insurance?

It’s not mandatory, but it’s still highly recommended when purchasing a new vehicle and going through several insurance plans and financing options. Gap insurance gives you peace of mind and saves you money in the event of an accident. Contact our finance team if you have questions about gap insurance or if you’re interested in purchasing it.

Explore Insurance Options at Acura of Escondido

Even if you just started the car shopping process, it’s important to know about your different insurance options. We want you to understand what’s needed, and what you want, before making the trip to Acura of Escondido to buy a car. The right coverage can save you a lot of time and money down the road. Contact us today with any questions you have or if you would like to schedule a test drive.

Still doing research on the car-buying process? Check out the ins and outs of refinancing an auto loan.

Posted in Finance/Insurance