What is it?
Gap Insurance sounds like insurance for a popular mall store in the 80’s & 90’s.
But that’s not it.
When talking about insurance, anyone that has a loan on a vehicle might need gap insurance.
So, what is it?
If your vehicle is stolen or declared a “total-loss,” your auto insurance carrier will only pay what they determine is the actual cash value.
Actual cash value can be very different than what is owed.
The difference is known as: the gap. Gap coverage covers this amount.
Without gap insurance the lender will hold you responsible therefore look to you have pay the difference between the actual cash value and the amount left on the loan.
Many insurance companies allow Gap insurance to be added to the Massachusetts auto policy.
What’s the cost?
The cost can range from between +$25 annually to +$120.
Sometimes Gap coverage is included in lease agreements.
If leasing, make certain you know whether Gap coverage is included or not because it might be quite a shock to learn you don’t.
Is Gap coverage a good idea?
In conclusion, depending on the gap, it might be a great idea!