What is Gap Insurance?

There are many insurance coverage options to look over once you buy a new vehicle. Of these, it might benefit you to opt for gap insurance. So, what does gap insurance do? Put simply, gap insurance is designed to cover the gap between the owed amount on the car and the true cash value of the car at the time of an accident. While this insurance isn’t required, it can be very helpful to have in the event of an accident, especially after recently buying the vehicle. Learn more about what all this insurance covers as well as how it can further benefit you and your Plano drives.

What Does Gap Insurance Cover?

What most drivers should keep in mind is that gap insurance covers a variety of issues related to your new vehicle, however, this insurance is only meant to cover damage to your vehicle, no property or bodily injuries. Here’s 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’s meant to cover total loss in the event of an accident. While this is optional coverage, it might be worth talking to your insurance company about.

Do I Need Gap Insurance?

In short: no, though it is highly recommended that you opt for this insurance when purchasing a new car as you go through the various insurance plans and financing options. Gap insurance is especially helpful if your dealership offers a plan that includes deductible coverage. In addition, you’ll gain peace of mind and save money in the event of an accident. Speak with our financing team to talk about buying gap insurance today.

Explore All Insurance and Finance Options at Town North Mazda

Whether you’re looking to purchase or just starting to look, it pays to have knowledge of various insurance coverages, including gap insurance. Learn more about insurance options as well as financing plans when you visit Town North Mazda near McKinney. Our finance department is ready to answer all of your questions. Contact Town North Mazda today to schedule an appointment, with any questions, to learn how to refinance a car loan, compare the mazda3 configurations, or even to find fun Fall activities in the DFW area!