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?

Answer provided by
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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