What is Gap Insurance Coverage and Why It’s Important?
What is Gap Insurance Coverage and Why It’s Important
Gap insurance is a form of auto insurance in Florida that covers the difference between what your car is worth and what you owe on it. If you total your car, it will cover the difference between what you owe on the car and what it’s worth.
When shopping for a new vehicle, many people are tempted to buy a used one. However, there are some risks associated with purchasing a used vehicle. One risk is that the vehicle may have been in an accident or had significant damage from hail or flood. Gap coverage protects against this risk by covering the difference if something happens to your vehicle before it has fully paid off.
What Is Third Party Gap Coverage in Florid and How Does It Work?
Third-Party Gap Coverage is a coverage that protects losses not covered by other policies.
This type of coverage is useful in many situations. For instance, if your car is stolen and you have comprehensive coverage, the theft may be covered by the comprehensive policy. But what if your car is totaled? The comprehensive policy may not cover this situation because it only covers theft or damage to your car. In this case, third-party gap coverage would provide protection for the loss (i.e., the cost of a new vehicle).
Is Gap Enough or Do I Need Full Coverage Too?
Gap insurance covers the difference between what your car was worth when you bought it and what it’s worth now.
Gap insurance is not the same as full coverage, but it will cover some of the cost to repair or replace your vehicle if you are in an accident.
The less you drive your vehicle, the less you may pay for car insurance. At Insurance Direct, we offer the best car insurance for low-mileage drivers at the best rate.
Example of Gap Insurance
If you owe $40,000 on your loan and your car is worth $35,000 then your gap insurance coverage will cover the extra $5,000 (minus the deductible).
3 Common Questions and Answers on Gap Insurance in Florida
1. What Is The Definition of Gap Insurance?
Gap insurance covers the difference between the value of your car and the amount you owe on your car loan.
It’s a type of auto insurance that covers the difference between the value of your car and the amount you owe on your car loan. It is not required by law, but it can help protect you from financial disaster.
2. Why Do I Need Gap Insurance in Florida?
Gap insurance is a type of auto insurance in Florida that covers the difference between what you owe on your car and the cost to replace it. It is useful if you are leasing or financing a car, or if you owe more than your car is worth.
It protects drivers from paying out of pocket in case their current vehicle is totaled in an accident. It’s also helpful to those who have negative equity on their vehicle and may be at risk of owing more than their car is worth.
3. Can I Get It From My Florida Auto Insurance Company?
You can get Gap Insurance from your insurance company. It is a type of insurance that covers the difference between what you owe on your car loan and what your car is worth if it were totaled or stolen.
Gap Insurance pays the difference between the amount owed on your car and its current market value. If you owe $10,000 on a car but it’s only worth $9,000, then it will pay off that $1,000 gap.
It can be purchased up to 15 days after you purchase or lease a new vehicle. It can also be purchased when you have an existing auto loan or lease agreement for a new vehicle.
Average Cost Per Year
State Minimum Car Insurance
Basic Full Car Insurance
Full Car Insurance
When Should I Get It?
You need gap insurance if you owe more on your lease than your car is worth. This will cover all of the fees that are left over after you get into an accident. When you get into an accident – you still are liable for the remainder of the lease and the repair costs. Even having insurance on your car still leaves you with the remaining money left to pay out. While it helps, it sometimes doesn’t fully cover the gap but can decrease it by around $5000. If you are leasing a vehicle, get an auto quote with us today.
When Should I Not Get Gap Insurance in Florida?
It is not needed for people who outright own their cars, since there is no lease left to pay. It doesn’t cover anything else, other than leasers. If you own a car, then consider getting full coverage auto insurance which will keep you fully insured.