Gap insurance is a type of insurance coverage that helps protect you financially if your car is totaled or stolen and you owe more on the loan or lease than the vehicle is worth.
While gap insurance provides valuable protection in many situations, there are some scenarios where it may not pay.
Failure to maintain primary auto insurance coverage
Gap insurance is designed to work alongside your primary auto insurance coverage. If you fail to maintain the required primary insurance on your vehicle, the gap insurance policy may not pay.
Late or missed payments
If you’re late on your car loan or lease payments or miss payments altogether, your gap insurance may not pay in the event of a total loss.
Unauthorized or fraudulent use of the vehicle
Gap insurance may not pay if the loss or damage to your vehicle occurs due to unauthorized or fraudulent use, such as lending your car to someone not covered by your policy.
Gap insurance is not intended to cover your vehicle’s mechanical repairs or regular maintenance expenses.
Make sure to review your gap insurance policy carefully and understand the terms and conditions to know when it will provide coverage and when it may not. If you have any doubts or questions, don’t hesitate to contact your insurance provider for the answers.