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Are there instances when gap insurance won't pay out?

I want to add gap insurance to my car insurance policy, but I'm not sure what all it covers. Are there any times when gap insurance wouldn't pay out?

avatar
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“Gap insurance will only pay out if you total your car and there’s a difference between the actual cash value (ACV) of the car and the
remaining loan balance
.
Gap insurance
 won’t pay out if:
  • the car breaks down from wear and tear
  • the car can still be reasonably repaired
  • you fail to make monthly payments on your gap insurance”
MORE:
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Gap InsuranceNew Car Replacement Insurance
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