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The Curious Bag
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In all 50 states, liability auto insurance is required by law. Lenders also may require you to maintain full coverage to protect their investment. For your own peace of mind, you may want to consider adding stop gap insurance to your auto policy.
What is Stop Gap Insurance
Stop gap insurance covers the difference between the value of the car and the amount owed on the vehicle.
Who Should Consider Gap Insurance
Stop gap insurance makes sense for people who are financing or leasing their car.
Benefit of Stop Gap Coverage
Because stop gap insurance makes up the difference between the car's value and the amount owed, it can be helpful if a car is totaled due to an accident but the value of the vehicle is lower than what is owed on the loan or to the leasing company.
Consequences of Not Having Coverage
Without gap insurance, you are responsible for paying off the difference between what is covered by the collision or liability insurance and the amount owed on the car. This can place individuals in financial difficulty.
How to Buy Stop Gap Insurance
Gap insurance is sometimes included in leasing agreements so check the paperwork. If not, you can purchase this additional coverage through your existing auto insurance provider. The costs vary based on your driving record and the amount of the policy.
Source:
Brooks Insurance Agency: Stop Gap Insurance
Auto Insurance Oklahoma City: Benefits of Stop Gap Insurance
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