What is GAP insurance coverage?
What is gap insurance? gap may or may not be insurance. The first thing to remember is and this often gets confusing. Exacly Insurance is regulated by each individual state, it’s going to be a state law issue in terms of weather approaches insurance or not. In most states, gap is non-insurance.
You may be able to go to insurance company and buy a gap product but what you get from a car dealership. It’s essentially a waiver, so its called gap is guaranteed auto protection and what that does is if you were to buy a car in finance it. The car then gets totaled in an accident, obviously as we heard about the depreciation before the car is going to be worth less money than you. Its simple understand of what is gap insurance.
What the gap protection will do is pay the difference between the two. Obviously if you was buying a very expensive car let’s talk about the caller, i think it was ordering $5,000 of negative equity. If he was to put that into this car deal into the loan, he’s already $5,000 upside down.
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That on top of that he’s got some depreciation, if he was to go out in the first couple of months and have an accident told his car and then get paid wholesale for it, in this case you should know what gap insurance is. He could have as much as an eight or nine or ten thousand dollar gap there.
If he was able to for a few hundred dollars by a product that would erase that, in his case that would probably be a pretty good deal. You know what you again you’ve got to look at your facts and circumstances understand what the product is and what it does.
What gap is going to pay off a difference between any settlements that you’ve got of what you owe in the event is lost in the vehicle. I hope this explanation can answer of your question about what is gap insurance simply.