As an independent insurance agency, personal lines is an important part of the products
At Body-Borneman, we know that our clients have more than automobiles and homes
Body-Borneman specializes in Commercial insurance, with over 2,000 clients
Guaranteed Auto Protection Insurance, which is otherwise known as GAP Insurance, is one of the most complicated and technical insurance policies on the market. At the same time, GAP insurance is a life saver for most vehicle owners, especially those with brand new cars. This form of insurance covers the difference between the Actual Cash Value of a vehicle that has been damaged or stolen and the amount owed on a leased or loaned vehicle. So in other words, a GAP loan will pay off the remainder of what you owe for your vehicle loan after an accident or theft.
Rather unfortunately, cars depreciate and begin to lose value as soon as they leave the lot from which they were purchased. This is particularly troublesome if the vehicle has been completely destroyed in an accident or if it has been stolen and cannot be recovered. This is where GAP insurance steps in to save the day.
For an example of how GAP insurance works, consider this scenario: You leased a new car for $30,000 and after two months, you were hit by a drunk driver and your car is completely totaled. After an assessment by your insurer, it is determined that your car is only worth $24,000 due to depreciation. Although they will pay the amount that they determined the car is worth, you are left not only without a car, but also a hefty sum of $6000 to pay off to the dealership that you leased your car from.
Well, this would only be the case if you did not have a GAP insurance policy. If you did decide to invest in GAP insurance, then the remaining $6000 would be paid off and you would be left with a balance of Zero. This then gives you the freedom and peace of mind to go out and purchase a new car. Without this loan, you the driver, will be responsible for payment of your lease even with no car to drive. This is particularly crippling if you have to make these repayments while recovering from minor to severe injuries caused by the accident. At the very least, it will make it much more challenging to purchase a new car.
GAP loans have grown in popularity over the past few years due to heavy endorsements from both commercial and or personal auto policies, both of which are easily accessible online. It is for this reason that you will find that this policy covers a large number of vehicles, and is particularly popular with drivers of leased vehicles.
As with every other policy, one must always follow the golden rule…ask questions! Although GAP is mostly considered to be an add-on to a standard auto insurance policy, it is still wise to know everything there is to know about it before adding it to your list of expenses.
Some of the questions you should ask include: Can I afford this considering all that I already have to pay for? What are other GAP customers saying about this particular policy? Shop around and ask other customers for their reviews, look out for who is offering the lowest deal (this information is readily available online). Should I just go ahead and add it in with my current auto insurance policy? This could work out to be cheaper for you even though GAP is already relatively cheap. One should feel free and comfortable enough to ask your dealer what GAP insurance will be in place from the minute your vehicle is in your hands in order to determine whether you think it is worth the purchase.
With that said, there are three types of GAP:
With some insurers, you really don’t have a choice. To ensure that they get paid even in the worst cases, including thefts and accidents, many insurers will insist on you taking the add-on with your main policy and they are well within their rights to do so. With that said, just because this insistence only applies to some insurers, that does not mean that you should opt out of a GAP if you stumble across an insurer who doesn’t insist the coverage be applied to your policy.
In reality and logically speaking, it should be one of the first things you purchase when buying a car with a small down payment, or especially when leasing a new car. You might see it as a bigger dent in your pockets right now, but it is far lesser than the costs you would owe if you didn’t take it and you end up losing your vehicle completely to either thieves or in an accident.
Before rushing off to sign on the dotted line, you should always read or ask about the parts that some insurers might not tell you. They say all that glitters is not gold and in the case of GAP, although it is a very important policy to purchase, there are some home truths that might dull its shine.
Here are some extras that you need to know with GAP Insurance:
Talk to a Body-Borneman agent today about how you may benefit from GAP insurance. Even if you are not looking to purchase a new car at this time, speaking with an agent about GAP insurance options can help you to better budget what would be best for your future. We only want to make sure that in the event that your vehicle becomes completely unusable, you are not struggling to find transportation. Call to experience our superior service and expertise today.