Everything You Need to Know About GAP Coverage Auto Insurance
GAP Coverage Automobile Insurance is also called Guaranteed
Asset Protection or Guaranteed Auto Protection in the North American insurance industry.
This type of insurance plan coverage will pay for the discrepancy between the
balance owed on the loan, vehicle, or lease, and the real cash value of the car
or truck. This protection is typically used upon the purchase of used and new
small cars and trucks and big, hefty trucks. In some cases, your lease contract
or loan company will demand it.
What Does it Cover?
GAP will cover the amount on the loan that is the difference
between the value of the vehicle and the amount that another insurance policy
covers. Typically, your finance company will offer you this kind of coverage at
the time you purchase the vehicle. Most auto insurance companies offer this
coverage as well to its consumers.
Obtaining GAP Insurance
You can obtain GAP through two ways: through your insurance
company or at your dealership. If you choose to obtain GAP Coverage through
your insurance broker, this is regulated by the insurance industry.
Either method you decide to acquire it, the coverage will be
the very same and it is offered as a soft product through the automobile
dealer. The protection is typically financed along with your lease or loan. Any
type of claims you submit are subject to an absolute loss, that is generally
established via the third-party evaluator with the primary insurance company.
More about GAP
Exclusions to your GAP Coverage Auto Insurance vary by the
country or state. Many states in the United States require that a car
dealership offers GAP at the point of purchase of a used or new vehicle. Some
other states only require that an insurer offer it if the client asks about it.
It's important to note that GAP coverage is an optional
product. Some of the finance companies require you to obtain it as a condition
to obtain a loan from them. The Truth In Lending Act does leave out GAP
Protection premiums from any financial expenses in the case that it was not
mandated by the financial institution, or if premiums were not divulged in
writing, or if the customer gave a written request for the insurance policy.
Before you make the purchase this coverage type, think about
the policy and the size of your down payment. If you are setting down 20% or
less on your down payment for your car acquisition, you may need the
GAP-especially if you are acquiring a vehicle that will decrease in value
quickly. Make sure to check with your auto insurance policy and how it is written. You will
not need the GAP Coverage if your policy will pay off your financed amount in
full.
David Baldwin is a writer, avid car enthusiast and retired
insurance agent. He is an active contributor to Car Quotes Instant, the
#1 destination for getting auto insurance tips and auto insurance quotes.
Article Source: http://EzineArticles.com/?expert=David_A_Baldwin
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