Gap Insurance: Where to Buy It

What Is Gap Insurance?

Gap insurance, also known as Guaranteed Auto Protection, is an insurance policy that helps cover the gap between the amount an automobile is worth and the amount the owner still owes on their loan. This type of insurance is often required by lenders when an automobile is financed. While the cost of the insurance is added to the loan, it can be beneficial for buyers who are upside down on their loan.

Benefits of Having Gap Insurance

Gap insurance is beneficial to have in the event of an accident, theft, or other incident that would cause the car to become total loss. In the event of an accident, the insurance policy pays the difference between the amount the automobile is worth and the amount the owner owes on the loan. Without gap insurance, the owner would be responsible for the entire loan amount.

In addition to providing financial protection, gap insurance also provides peace of mind knowing that the owner is not at risk of financial hardship in the event of an accident. The expense of the insurance policy is well worth the protection it provides.

Where to Buy Gap Insurance

Gap insurance can be purchased from a variety of sources. Most auto insurance companies offer gap insurance as an optional coverage. It is also available from auto dealerships when the car is purchased. Auto dealerships typically offer gap insurance as an add-on to the loan. The cost of the insurance from the dealership may be higher than from an auto insurance company.

Gap insurance can also be purchased from a third-party provider. Third-party providers may offer lower rates than insurance companies or dealerships. It is important to compare rates from various providers to get the best deal.

Conclusion

Gap insurance is an important type of insurance to have if you are financing an automobile. It provides financial protection in the event of an accident, theft, or other incident that would cause the car to become a total loss. Gap insurance is available from auto insurance companies, auto dealerships, and third-party providers. It is important to compare rates from various sources to get the best deal.