Yes, you have gap insurance on your car if you specifically purchased it as part of your auto insurance policy. It is not automatically included in standard car insurance coverage, so you must opt for it separately.
Gap insurance, or guaranteed asset protection insurance, is designed to cover the difference between the amount you owe on your car loan or lease and the actual cash value of your car in case it gets totaled or stolen. This can be particularly useful if you owe more on your car than it is worth, as it will help you avoid a financial burden.
FAQs about gap insurance
1. Is gap insurance necessary?
Gap insurance is not required by law, but it can be extremely helpful in certain situations. If you owe more on your car than its actual value, gap insurance can protect you from owing money on a car you no longer have.
2. Can I add gap insurance to my existing policy?
Yes, you can typically add gap insurance to your existing auto insurance policy. Talk to your insurance provider to find out if this is an option and how much it would cost.
3. How much does gap insurance cost?
The cost of gap insurance can vary depending on the insurance provider and the coverage limits you choose. On average, it can add around $20-$30 per year to your insurance premiums.
4. When should I consider getting gap insurance?
You should consider getting gap insurance if you financed or leased a new car, as the depreciation of the car’s value is highest in the first few years. If you owe more on your car loan than the car is worth, gap insurance is a good idea.
5. Can I cancel gap insurance?
Yes, you can usually cancel gap insurance if you no longer need it. However, make sure to check with your insurance provider about the process and any potential fees for canceling.
6. Does gap insurance cover my deductible?
No, gap insurance does not typically cover your deductible. It covers the difference between what you owe on your car and its actual cash value.
7. Does gap insurance cover theft?
Yes, gap insurance can cover theft if your car is stolen and deemed a total loss. It will help bridge the gap between what you owe on your car and what your insurance company pays out.
8. Are there any restrictions on the age of my car for gap insurance coverage?
Some insurance providers may have restrictions on the age of the car for gap insurance coverage. Typically, gap insurance is available for newer cars that are still being financed or leased.
9. How do I know if I have gap insurance on my car?
Check your auto insurance policy documents or contact your insurance provider to confirm if you have gap insurance on your car. It should be listed as a separate coverage option.
10. Can I transfer gap insurance to a new car?
In most cases, you cannot transfer gap insurance from one car to another. You will need to purchase a new gap insurance policy for your new car, especially if the financing terms are different.
11. Can I purchase gap insurance after buying a car?
Yes, you can usually purchase gap insurance after buying a car, although it is recommended to do so sooner rather than later. Some insurance providers may have a time limit on when you can add gap insurance.
12. Can I get a refund if I sell my car with gap insurance?
You may be eligible for a partial refund of your gap insurance premium if you sell your car before the policy term ends. Contact your insurance provider for more information on their refund policy.