If you suffer a total loss, you may find you owe more on the remainder of your loan or lease than the settlement payout from your insurance policy. That’s because the amount outstanding may exceed the vehicle’s Actual Cash Value (ACV). In other words, there’s a “gap” between how much you owe on your vehicle and how much you’ll be reimbursed for it.
That’s Where Gap Coverage Comes In
Gap Coverage is an endorsement that is added to an auto policy. It would provide payment to the insured for the difference between the damage of the automobile and the amount still owed on it.
If you purchased your new vehicle with a loan, check with your Connecticut Insurance Exchange agent about adding Gap Coverage. You’ll find in almost all cases, gap coverage is far less expensive from us than from a dealership. Here’s why — not only can the dealership’s price be much higher, it gets added to the loan agreement so you would pay interest on it as well.
What You Need to Know About Gap Coverage…
- It is only available for new private passenger autos, pickup, or vans
- It must be requested within 30 days of purchasing your new vehicle
- It is not automatically included in loan agreements
- Most often, it is automatically included in a leased vehicle agreement
- It does not cover things like overdue payments, extended warranties, credit life insurance, or carryover balances from previous loans or leases
So, before you sign on the dotted line, contact your Connecticut Insurance Exchange agent and ask about low-cost Gap Coverage for your new vehicle today.