What Is Geico Auto Insurance Gap Coverage?

What Does Gap Coverage Do?

Gap coverage is designed to cover the “gap” between the amount you owe on your vehicle loan and the actual cash value (ACV) of your vehicle in the event of a total loss. When you finance or lease a vehicle, you will typically owe more on the loan than the actual value of the vehicle. This is because the value of your vehicle depreciates over time. In the event of a total loss, your insurance company will typically only pay out the ACV of your vehicle, leaving you with a remaining balance to pay off. Gap coverage will cover the difference between the ACV of your vehicle and the remaining balance owed on your loan. Without gap coverage, you may be stuck paying the remainder of your loan out of pocket.

How Does Geico Gap Coverage Work?

Geico offers gap coverage as an add-on to your existing auto insurance policy. Once added, you will receive coverage up to 25% of the purchase price of the vehicle. For example, if you purchase a vehicle for $20,000, you would receive up to $5,000 in gap coverage in the event of a total loss. This coverage will help to cover the difference between the ACV of your vehicle and the remaining balance owed on your loan. It is important to note that gap coverage will only cover the difference in the event of a total loss and will not cover any other type of claim.

When Should You Purchase Gap Coverage?

Gap coverage is an important type of coverage that can help protect you financially in the event of a total loss. If you are financing or leasing a vehicle, you should definitely consider adding gap coverage to your existing auto insurance policy. It is important to note that you should purchase gap coverage at the time you purchase your vehicle, since it is typically not available to purchase after the fact. Additionally, you should always carefully review the details of your policy to ensure that you understand the coverage limits, exclusions, and other important details.

How Much Does Geico Gap Coverage Cost?

The cost of gap coverage will vary depending on the value of your vehicle and the amount of coverage you need. Generally speaking, you can expect to pay around $20 to $30 per year for gap coverage. It is important to note that most auto insurance companies will only offer gap coverage for a limited time, usually for the first five years of ownership. After this period, you will no longer be able to add gap coverage to your policy.

Conclusion

Gap coverage is an important type of auto insurance coverage that can help protect you financially in the event of a total loss. If you are considering buying a new vehicle, or if you have recently purchased a new or used vehicle, you should consider adding gap coverage to your existing auto insurance policy. Geico offers gap coverage as an add-on to your existing auto insurance policy, and the cost is typically around $20 to $30 per year. Be sure to purchase gap coverage at the time you purchase your vehicle, since it is typically not available to purchase after the fact.