What is gap insurance and why do I need it?

"Do I need gap insurance if I already have full coverage? What does it cover?

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Answer
“Great question! It gets confusing with so many types of insurance out there.
Gap insurance or gap coverage pays for the difference between your vehicle’s value and the amount owed on the vehicle loan. A vehicle begins to depreciate immediately when you take possession of it, so it is common to owe more money for the loan on the vehicle than what the car is worth (the actual cash value).
Full coverage refers to having comprehensive coverage and collision coverage on the vehicle, in addition to liability coverage. This only pays up to the actual cash value of the vehicle in most instances.
If your car is no more than two to three years old and you have a loan or lease, it’s recommended that you get gap insurance. “
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Shannon Martin
Answered on Apr 14, 2021
Shannon is an expert in personal lines liability insurance with 13 + years of insurance industry experience. She also served as a special insurance liaison to AARP members for 6 of those years. She is a graduate of UL Lafayette and currently resides in NY with her family. Shannon is also an amateur juggler, ukulele player, and is a time travel paradox theory enthusiast.
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