Does gap insurance from a car insurance company cover negative equity?

I want to reject my lender's gap insurance based on the cost. Will my gap insurance from my car insurance company cover negative equity?

Answer
Gap insurance covers negative equity if you’re in accident where you’re at fault. If your vehicle is totaled and you have gap insurance, it would cover the difference between what you owe on your loan and the value of your vehicle.
A gap insurance policy from a car insurance company will typically cover the same amount as a lender’s gap insurance. However, every company is different. Some carriers may pay a specific amount or percentage of coverage when your vehicle is totaled as opposed to the total remainder of the loan balance.
Before you reject your lender’s gap insurance, you’ll want to shop around and compare coverage. Use the Jerry app to compare coverage from top insurers to 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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