Benefits of GAP Insurance | Grand Prairie, TX
Car insurance is a necessary expense that comes with car ownership. When you buy a new or pre-owned car from Graff Chevrolet in Grand Prairie, Texas, you will need to shop around for a policy, budget for premiums, and determine the coverage you need. You might also want to purchase additional coverage, like GAP insurance.
Why GAP Insurance?
GAP or Guaranteed Asset Protection insurance is a supplemental policy. It offers you compensation if you owe more money on your vehicle than your traditional policy pays out after an accident or loss.
In the event of an accident, weather-related event, or incident that leaves your car a total loss, your traditional insurance would pay what your vehicle is worth, the actual cash value. If your car is totaled in the first few years of ownership, the ACV may not satisfy your loan balance. With GAP insurance, you won’t be responsible for the difference between what your car is worth and what you still owe to your lender.
For example: Your car is totaled in an accident, and your insurance company pays you $20,000 for your vehicle. That is the ACV of your vehicle. Unfortunately, you owe more than that on your vehicle — $28,000. If you do not have GAP insurance, you are responsible for the remaining $8,000, even though your car has been totaled and you cannot drive it anymore. If you have GAP insurance, that policy will cover the $8,000.
Please note: In order to have GAP insurance you must also have a basic car insurance policy (basic comprehensive and collision insurance). GAP insurance only pays on a claim after the basic car insurance policy does.
GAP Insurance Coverage
Damages caused by theft, fire, vandalism, and accidents are typically covered by GAP insurance. Damage caused by weather-related events such as floods, tornados, and hurricanes is also covered by GAP insurance. Be sure to read your policy carefully for full terms and conditions.
The finance experts at Graff Chevrolet in Grand Prairie, Texas, are available to answer all your questions about financing and insuring a new car. Contact them today!