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What is Gap Insurance?

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When you purchase a new car from Wolfchase Honda, you’ll have to look over various options in terms of financing and insuring your car. One of the optional insurance coverages you can get for your vehicle is gap insurance. So, what does gap insurance do? Gap insurance is designed to cover the gap between the owed amount on the car and the actual cash value of the car at the time of an accident. Find out when gap insurance can be helpful, and what is covers below.

What Does Gap Insurance Cover?

Gap insurance helps cover a variety of issues that can damage your vehicle. Memphis drivers should keep in mind though, is that it is not meant to cover property or bodily injuries, but specifically vehicle damage or theft. With that, here’s exactly what gap insurance does, and does not, cover:

Gap Insurance Covers:

  • Theft
  • Fire
  • Vandalism
  • Accident
  • Acts of nature (tornado, hurricane, flood, etc.)

Gap Insurance Does NOT Cover:

  • Deductible (though some gap insurance policies allow this)
  • Engine failures and other mechanical repairs/malfunctions
  • Death
  • Extended warranties

The main takeaway from the question ‘what does gap insurance do?’, is that it is meant to cover total loss in the event of an accident. While it is an optional coverage, this can be beneficial in protecting you from the unexpected.

Do I Need Gap Insurance?

No, it isn’t a requirement, but it is highly recommended that you opt for gap insurance when financing a new car. Gap insurance is especially helpful if your dealership offers a plan that includes deductible coverage. In the unfortunate even your vehicle is stolen or damaged, this will protect you from having to pay off a loan for a vehicle you no longer have. Speak with our financing team to talk about the peace of mind gap insurance offers.

Explore All Insurance and Finance Options at Wolfchase Honda

Whether you’re just starting to look or ready to purchase, making sure you understand your various insurance plans options is crucial. Speak with Wolfchase Honda to learn what you need, and want, before purchasing a car. The right coverage can save you time and money down the road. Contact us online or stop by today!

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