If you just purchased a new car and you just read this title your probably wondering, What is Gap Coverage?
Most people know that when you buy a new car the value of the car drops substantially as soon as you drive it of the dealers car lot. Most insurance policies only cover your vehicle to the value that it is currently worth or market value. So, when you drive your new car of the lot it’s not insured to what you paid for the car and you most likely have a loan on the vehicle that you are responsible to pay in full. If you get in an accident you will have to pay out of pocket to cover the difference better the purchase price and market value.
What covers the difference between the purchase price and the market value? This is where Gap Coverage comes in to pay the difference. Some loans have Gap Coverage built in. If not, you need to add it to your auto insurance policy. Gap coverage is normally only another $5 to your total premium.
Please give us a call if you are an Ohio resident and have a question about insurance. Our number is (614)799-1217.