Think youíre covered if your car is stolen or totaled in an accident? Think again.
During the first few years that you own your vehicle, your loan/lease balance can be higher than the actual value of your vehicle as a result of depreciation, resulting in a financial gap between what you owe and what the car is actually worth at that time. In the event your vehicle is deemed a total loss due to an accident or theft, your auto insurance will usually only cover the actual cash value or market value of your vehicle (less your deductible). This leaves you personally responsible for the difference between what you owe and the current market value of the vehicle - which could mean thousands of dollars out of your pocket.
Guaranteed Auto Protection protects individuals who finance a new or used vehicle who find themselves in situations like this. GAP insurance is a loan/lease deficiency waiver that covers the difference between the actual cash value of your vehicle and the loan/lease balance. It will also cover the actual deductible amount stated in your primary insurance policy of up to $500 or $1000, depending on your financial institutionís program limits, in the event of a covered GAP claim.