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?

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Eric Schad
Answered on Jul 21, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
“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”
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