I just got a new car and I’m thinking it might be smart to get gap insurance in case something happens. Not to be tragic, but what if the absolute worst happens? Does gap insurance cover death?
Reviewed by Shannon Martin, Licensed Insurance Agent.
Congrats on the new set of wheels! Preparing for worst-case scenarios after this kind of investment isn’t a bad idea, even if it does seem tragic. To answer in short—gap insurance does not cover death.
, or guaranteed asset protection, essentially covers the difference between your car’s current market value and the price you’re still paying in loans.
Because cars depreciate so quickly the moment they’re driven off the lot, gap insurance steps in to protect you financially should your car get stolen or totaled. In this scenario,
will only pay out the market value of the car, so gap insurance bridges the difference to make sure you’re not still paying loans on an unusable vehicle.
In terms of covering loan payments after a car-owner dies in an accident, this will typically become the responsibility of any co-signers or joint owners. If there are no co-signers or joint owners, the car becomes an asset of the deceased’s estate—an executor will then determine how to continue paying the loan.
If you’re interested in coverages that pay for death expenses like funerals, medical bills, and loss of income in the event of a fatal accident, you may want to look into the following:
The app is free to use and instantly analyzes custom quotes from over 50 top insurance companies to track down the lowest rates available to you. The average user ends up saving $887 a year on
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