You will be amazed to know that the gap insurance is applicable in the case of auto accidents, which may lead to the total loss of the vehicle. Moreover, in this scenario, you will be given payment for the difference between the amount that is insured to the person and the outstanding loan for the vehicle. One thing that you must keep in your mind that gap insurance is not at all the part of the law. Hence, it’s not mandatory to get the gap insurance for your vehicle. If you want to know more about it, then you can visit the site https://www.general.com. Majority of the situation it has been noticed that when you walk down to the finance office to get the insurance done for your vehicle then at that moment you are given the opportunity to purchase the gap insurance. And the most shocking thing is that some finance manager does not even ask the person before giving this insurance to the person, and they simply provide a reason that it will be helpful at the time of your need.
Let us understand what GAP is. Just think of a situation when the, unfortunately, the car has come across an accident or it is stolen. Then at that moment, the auto insurance is liable to pay only the cost of the vehicle, which is at that instance of time. But what you can avail at the gap insurance is they cover the gap that exists between what the insurance company pays for the vehicle and the amount that you owe to the finance company for the car loan. If you have not been insured by the gap insurance, then the difference amount needs to be paid form your pocket. On a survey, it was found that people have a false believe that if they have taken car insurance, then they are covered completely, but it is not at all true. In some cases, you need to provide money for the loss that you face.
Now you might be wondering that is GAP insurance worth that it asks to pay. So, let me tell you that there are almost three instances when it is recommended to opt for gap insurance.
- If you have given a good amount for the down payment of your vehicle in order to reduce the financed amount, then it is feasible to opt for gap insurance.
- If any sort of rebate is applied by the manufacturer in order to reduce the finance amount.
- The last one is if you get an exceptional price at the loan value of your vehicle.
The gap insurance company is not going to send any sort of check, even if there is any lienholder on the vehicle. It is only until or unless you pay the GAP insurance outside the finance agreement. But if the same is included in your agreement, then it may be possible that the insurer can send a check to the lienholder. Apart from all this, it has also been noticed that it will help to reduce the amount that you owe on the vehicle with the difference in the total premium of the GAP. Generally, it has not been noticed that the gap insurance refund is done to the insured policy holder. The best thing is that some of the auto insurance company includes the gap insurance for free; this means that they do not need to pay any extra charges for the vehicle. It is beneficial for the insurance company also, as they will not run in loss even if your vehicle has been stolen.