GAP Insurance
/gap in-SHUR-uns/
Covers the difference between your car's value and loan balance.
Definition
GAP (Guaranteed Asset Protection) insurance covers the 'gap' between what you owe on your car loan and your car's actual cash value if it's totaled. New cars depreciate quickly, so without GAP insurance, you could owe money on a car you no longer have.
Example
When Brian's new car was totaled, he owed $25,000 but the car was only worth $20,000. GAP insurance covered the $5,000 difference.
More Auto Insurance Terms
Insurance that pays for damage or injuries you cause to others.
Coverage for injuries you cause to others in an accident.
Coverage for damage you cause to others' property.
Insurance that pays to repair your car after an accident.
Insurance for non-collision damage like theft or weather.
Protection if you're hit by an uninsured driver.
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