Gap insurance stand for Guaranteed Auto Protection. With gap insurance, you will get 100% protection for the value of your car. Gap Insurance provides extra protection against motor vehicles, in the form of a guarantee against the difference between the replacement value received from the motor vehicle insurance policy in a total loss, at the initial purchase price of the vehicle. The total loss condition could be either due to damage, loss or theft. If you are interested to join this type of insurance, you should know What Does Gap Insurance Cover benefit that you will need in the future.
What Does Gap Insurance Cover Benefits? Some of the benefits of GAP insurance include first, cash benefit on the difference in the value of replacement of the vehicle, according to the valid supporting documents. Secondly, this type of insurance give protection for all types of passenger and pickup vehicles. By all means, this insurance does not hardly consider the kind and type of your car. There are other car insurance which need to analyze the type of your car, and its price. In that case, not all of your claim will be processed if your car type has high price. But in Gap insurance, it a will still process by all means.
What Does the third Gap Insurance Cover Benefits? This insurance will give the protection period, which is adjusted to the financing period. The financing period will take from 2 – 5 years term period. By all that means, the example simulation of gap insurance and claim calculation will be like as follows. In first time you bought car with price the around 20,000 USD, and then after some time you had an accident which allowed you to make claim. In that time after accident happened, you should calculate the price of the secondhand same type car with yours. Let say it is 16,000 USD in market price. We will then compare if you do not have gap insurance and if you have it.
If you do not have gap insurance, of course, you will not ask about What Does Gap Insurance Cover benefit. But then, because the market price for the secondhand car of yours is 160,000 USD, the value of replacement will be the same as the market price of your car at the time of claim. It means that you will obtain 160,000 USD too. While, if your car is covered by gap insurance, it will be calculated as follows. The market price for your car is 16,000 USD, which has “gap” 4,000 USD from the time you bought it. And then, the replacement you will receive is 20,000 USD. Gap insurance does cover the gap price between the original price of your car, and the market price in time you got accident.
By all means, What Does Gap Insurance Cover benefit? It covers the gap price of your car, in the time you bought it, and in that time you want to sell it (with market price). As we know that car price will decrease from time to time. Having gap insurance will turn back your payment in the first time you bought a car.