Can gap insurance help me if I'm upside down on my loan?

I have bad credit and had to get a loan with a longer term and higher interest rate. I currently owe more on my loan than my car is worth. Would gap insurance help if something happens to my car?

Answer
“When you’re upside down on your loan, gap insurance will help. Gap insurance covers the difference between what you owe on your loan and the actual cash value of your vehicle if you’re in an accident that totals the vehicle.
It’s common for people to owe more on their loans than the value of their vehicles, with about 45% of car owners upside down across the country. Without gap insurance, you are responsible for the remaining balance on the loan if your vehicle is totaled. Gap insurance only covers damage if your car is totaled and your insurance pays out the actual cash value of your vehicle.
Do you want to add gap insurance to your loan or go with a new insurer that offers it? Use the Jerry app to compare rates from some of the top insurers around the country and find the best rate.”
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Emily Maracle
Answered on Aug 16, 2021
Emily Maracle is a car insurance specialist living in New York. Originally from the Pacific Northwest, she has a degree in English Literature and a background in customer service. She enjoys cooking, gardening, and living sustainably. In the future, she can't wait to upgrade to a hybrid or electric car.
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