A definition of GAP insurance according to an article on the International Risk Management Institute website is:
GAP contracts pay the difference between what a primary
insurer pays in the event of a total vehicle loss, including theft, and the outstanding loan balance on the vehicle. (Approximately 2.5 million vehicles are totaled annually.) It is a form of credit insurance similar to credit life, credit disability, and credit property insurance.
insurer pays in the event of a total vehicle loss, including theft, and the outstanding loan balance on the vehicle. (Approximately 2.5 million vehicles are totaled annually.) It is a form of credit insurance similar to credit life, credit disability, and credit property insurance.This article illustrates an example of a person that was caught with GAP insurance that didn’t quite stretch far enough. USA Today wrote about the amount of people getting burned by negative equity. Bankrate.com has a quality article about GAP insurance and were it originated.
Before you plunk down some serious money for GAP insurance at a dealer think about giving your insurer a jingle.
