Inquiry into the workings of gap insurance on vehicle, what does it cover?

my gap policy payed the amount outstanding on my hp agreement after a non fault crash .if i didnt have gap i would be paying for a car i dont have.

Gap insurance will cover the difference between what the insurance company pays and your outstanding loan balance if your car is totalled or stolen and not recovered. Example, Car totalled: Fair market value at time of loss: $20,000.00 Loan balance at time of loss: $23,000.00 Auto Insurance company pays $20,000.00 Gap insurance pays $3,000.00 Your outstanding balance owed: $0.00 Without Gap insurance, you'll still owe the loan company $3,000.00. Sleep soundly! P.S. Keep in mind that in a couple of years you should owe less than the car is worth. In that case, Gap will pay nothing but you don't need it anyway as the insurance payout is enough to pay off the loan with something left over. For this reason, Gap insurance is pretty cheap. My bank offers it for free if I insure with their tied insurance company, USAA, which of course I do.

Gap insurance cover the difference in what you owe against the car and what the insurance company would pay you in the event of a total loss. Say you owe the bank 28,000 and the insurance co tells you the car pay off is only 21,000; your gap insurance would pay the 7,000 differrence. Some gap insurances will even give you extra $ toward a down payment on a new car. Mine pays off the loan and gives me $1,000 towards a new car. This is a must have if you have any neg equity or a new car.

Gap insurance covers the difference,your car would be paid off that's why its called gap.....it covers the gap of what you still owe on the car and what it is now worth. that's why it costs extra,its a great insurance to have ,talk to your insurance agent and he can give you all the information you need.gap costs extra and is not the same as other insurance its sort of a rider . talk to your agent OK American Family Insurance offers gap policy's on cars that are not brand new. at least in Carmel,IN.