Does AAA Insurance Offer Gap Coverage?

What is Gap Coverage?

Gap coverage is an insurance coverage that pays for the difference between the actual cash value of your car and the balance of your loan or lease if your car is totaled or stolen. It is often offered as an option when you are purchasing a vehicle. Gap coverage is also sometimes referred to as "loan/lease payoff coverage" or "guaranteed auto protection (GAP)."

The purpose of gap coverage is to bridge the gap between what is owed on a vehicle loan or lease and what an insurance company will pay if the vehicle is totaled or stolen. This gap can be significant, and gap coverage can help protect you from being stuck with a large bill while you are still making payments on your car.

AAA Insurance and Gap Coverage

AAA Insurance offers gap coverage to its customers. With AAA, you can purchase gap coverage when you buy or lease a new car, or add it to your existing auto policy. AAA's gap coverage includes a waiver of the deductible for repairs made to the vehicle and pays for up to $1,000 of the gap amount.

Gap coverage from AAA may be a good option for those who have bought or leased a new car and taken out a loan. The amount of coverage you can purchase depends on the amount of your loan or lease, up to $50,000.

Benefits of Gap Coverage

Gap coverage can provide you with peace of mind by helping to protect you from a large financial burden in the event of a totaled or stolen vehicle. This type of coverage can also be beneficial if you are making payments on a new car and the value of the car depreciates more quickly than you can pay off the loan.

In addition to covering the gap between what you owe and the cash value of the car, gap coverage can also help you pay for a replacement vehicle. If your car is totaled or stolen, gap coverage can help you pay for a comparable replacement vehicle.

Cost of Gap Coverage

The cost of gap coverage from AAA depends on the amount of coverage you need and the length of time you need the coverage. Generally, gap coverage costs between $20 and $30 per year. The cost of gap coverage may also be included in the financing of a new vehicle.

Is Gap Coverage Right for You?

Gap coverage can be a good option for those who have taken out a loan or lease to purchase a new car and want to protect themselves from a big financial burden if their car is totaled or stolen. However, it is important to weigh the cost of gap coverage against the potential benefit to decide if it is right for you.

Gap coverage may also be a good option if you don't have the funds available to pay off the loan or lease balance on your own in the event of a total loss or theft. In any case, gap coverage can help you protect yourself from a difficult financial situation if your car is totaled or stolen.