Does gap insurance apply if I let my auto insurance lapse?
I got into an accident with my financed vehicle. My insurance had lapsed and I'm also behind on my loan payments. I do have gap insurance. Would it help me?
“While gap insurance is designed to protect your vehicle in the event of a total loss, you are typically required to have valid insurance.
Gap insurance covers the difference between what you owe on your loan and the actual cash value of your vehicle. Without any insurance, the actual cash value of your vehicle isn’t being paid out.
Most lenders also require that financed vehicles carry both comprehensive coverage and collision coverage. Without these coverages, your vehicle isn’t protected in an accident.
It can’t hurt to reach out to your lender or gap insurance company to find out the terms and conditions of your coverage. If they aren’t able to apply your gap insurance due to your insurance lapse, you will be required to continue to pay your loan. “
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