GAP coverage can exempt the amount outstanding between you and the unpaid financial balance of your loan and the settlement amount offered by your insurer in the event of a total loss. For example, if you owe twenty-five thousand dollars on your loan and your car is only worth twenty thousand, without the supplemental insurance, you will receive a payment of twenty thousand dollars. Gap insurance coverage bridges the gap between what you owe on your car loan and what your car is actually worth. Essentially, its purpose is to avoid having to make a loan payment for a car you no longer own (or avoid multiple payments on the car, if you decide to buy another car with an outstanding loan balance).
Gap insurance is optional car insurance coverage that applies if your car is stolen or is considered a total loss. For some drivers, the convenience of buying emergency insurance right there is an advantage. You may find better savings if you check with an auto insurance company about breach insurance. Gap insurance in North Carolina covers the “gap” between the depreciated value of your car and the remaining balance of the loan, if the car is declared a total loss or stolen.
Gap insurance isn't required for any insurer or for any state, but some leasing companies may require you to buy it. All auto insurance comes down to financial protection, but emergency insurance is specifically related to financial health. However, if you had GAP insurance when you first bought your car, you'll receive 10,000 pounds (4,000 pounds from your insurance policy and 6,000 pounds from GAP coverage). For example, if an accident occurs and you've damaged your car or completely destroyed it, a standard policy may only pay you the current value of the vehicle at the time you file the claim; however, GAP insurance will cover the difference between what you still owe and what the car is worth.
As with any type of insurance coverage, it's generally best to compare the rates of the best auto insurance companies to get the best offer of uncovered coverage or other coverage you might need for a financed vehicle. All insurance products are governed by the terms of the applicable insurance policy, and all related decisions (such as coverage approval, premiums, fees and charges) and policy obligations are the sole responsibility of the insurance insurer. You can only use gap insurance in North Carolina if it is determined that the car cannot be driven and is a total loss, meaning that a simple bump on the fender would not involve the use of gap insurance. This information is not an insurance policy, does not refer to any specific insurance policy, and does not modify any provision, limitation or exclusion that is expressly stated in any insurance policy.
When there's a significant difference between the value of your car and what you owe for it, supplemental insurance is valuable protection. Basically, Gap insurance helps prevent you from having outstanding debts by paying the remaining balance of your car loan (after factoring in the payment of the actual cash value from the insurance company) when a total loss is declared.