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Can gap insurance cover the remaining balance of my new car's loan that is from an extended warranty?
I was recently in an accident that totaled my brand-new car. My insurance company valued my car at the cost I paid for it. However, I did purchase an extended warranty at the dealership. They rolled it into my loan so I still owe $1,800. Will the gap insurance I paid for cover this?
Emily Maracle · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“
Gap insurance
is used to cover the difference between the actual cash value of your vehicle and the amount you owe on your loan. Since the extended warranty was an additional add-on to your loan, gap insurance typically won’t cover this cost. As the vehicle is totaled and the warranty will be canceled, you may be able to receive a refund for it. You can reach out to the lender and dealership to confirm the terms and conditions of both your gap insurance and extended warranty.
“
View full answer
- Gregory R.
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