How Gap Insurance Help Car Owners

Scenario: You got your first decent job after a few unsatisfactory ones. You get into an apartment in a nice part of the city. You purchased your brand new car after selling your mom’s 2000 Honda Accord to the junkyard (the poor thing had barely any mileage left). You get yourself together. You go out with friends one night, nothing extreme, just a nice dinner with desserts afterwards, but what you didn’t see coming was a drunk driver slamming your car just as when you were about to step out of the café. The car was a total wreck and so is your heart for witnessing the crash of your newly bought vehicle. You cried because you got attached to Bella, you named your car Bella, and after a year and a half of bonding she just disappeared in a split second. You might get some decent amount of sum from the insurer but it won’t be enough to buy another car like Bella. But fortunately, you remembered that you have the gap insurance that got you covered. Listening to Aunt Marie finally paid off.


Gap Insurance

This scenario is not too farfetched (though the slamming of the car in a middle of a busy street is kind of). But the idea of car wrecks couldn’t be truer. You could be peacefully parked in sidewalk and then all of a sudden a truck out of nowhere accidentally rams your car to destruction. With this kind of situation, you feel that you lost the car and the hard earned money into nothing. But worry not, because if you insured your car you could get the actual value of the damaged car (not the purchase value but the market value) in cash. But this is fine if you totally paid the car for, but what if it under a lease agreement or worse loaned from the bank? You lost the car and you have to pay for the remaining outstanding balance that you have. This is when gap insurance becomes very helpful. Basically, gap insurance is a type of insurance that a car owner purchases to have a cushion between the car value at the time of wreckage and the remaining loan balance or the premature contract penalty for leased vehicles. This type of insurance will only be applicable of the vehicle is loaned out and is under a long-term lease agreement. For more comprehensive and detailed information hit