What is Gap Insurance and Do You Need It?

With 2019 finally here in the Thousand Oaks area and the holidays behind us, now is a perfect time to shop for a new vehicle. Here at Shaver Chrysler Dodge Jeep® RAM, we’ve got a wide selection of the best new models for sale. Additionally, we want to be a valuable resource when it comes time to buy a new vehicle like the 2019 RAM 1500. That’s why we’re covering a common topic that shoppers face, car insurance.

When you set out to purchase a new car, you’ll find that you have no shortage of car insurance options. So, how are you supposed to know which ones are worth your money? We’re here to help. One type of insurance we often get questions about is gap insurance.

Gap insurance is an acronym for “guaranteed asset protection” This type of coverage ensures that your lessor is protected if your car is totaled. Typically, you’ll bundle gap insurance with another policy such as collision insurance. So, how does it work?

If you’re in an accident and your car is totaled, your insurance company will investigate and determine the cause of the accident. Once established, either your collision insurance or comprehensive insurance will cover the cost of damage up to the current worth of the vehicle. The problem is that you probably still owe your leaseholder for the cost of the car. Gap insurance covers that remaining cost.

Gap insurance comes in hand when you total your car because it means that you don’t have to pay for both a new car and the remaining cost of your totaled vehicle. However, that doesn’t mean you always need gap insurance.

As your local Chrysler dealership, we recommend gap insurance when you purchase a new vehicle, but if you have an older model and don’t owe anything on it, you may not need it. Luckily, we’re here to help! Visit us today to shop new models and discuss your options.