What Does Gap Insurance Cover?

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When you are buying a new car from Haldeman Lexus of Princeton there will be a variety of financing and insurance options for you to choose from. Gap insurance is one of the optional coverages. What does gap insurance do? What does gap insurance cover? Well, it is designed to cover the gap between the owed amount on the car and the true cash value of the car at the time of an accident. Our finance team at Haldeman Lexus of Princeton discusses the details of this insurance coverage, and how it can benefit your Princeton, NJ area drives.

What Does Gap Insurance Do?

What does gap insurance cover? You know it’s the space between the owed amount and true cash value—this is a pretty vague description, though, and it’s understandable because gap insurance covers a variety of issues. One thing Hamilton, NJ drivers should keep in mind is that it covers damage to your vehicle, and not the property or bodily injuries. With that, here’s exactly what gap insurance does, and doesn’t, cover:

Gap Insurance Covers:

  • Theft
  • Fire
  • Vandalism
  • Accident
  • Acts of nature (tornado, hurricane, flood, etc.)

Gap Insurance Does NOT Cover:

  • Deductible (though some gap insurance policies allow this)
  • Engine failures and other mechanical repairs/malfunctions
  • Death
  • Extended warranties

Gap insurance is meant to cover total loss in the event of an accident. Though it is an optional coverage, it is worth talking with your insurance company about what it offers you, because, oftentimes, you can get a good deal.

Do I Need Gap Insurance?

You don’t need gap insurance. It is highly recommended that you get gap insurance when purchasing a new car, though. Gap insurance is especially helpful if your dealership offers a plan that includes deductible coverage. If not, the fees for gap insurance are often very low, or even can be a small one time payment. Having this insurance will give you peace of mind, and help you save money, in the unfortunate event of an accident. Speak with our financing team to talk about buying gap insurance.

Check Out Insurance and Finance Options at Haldeman Lexus of Princeton

Whether you’re ready to purchase your next Lexus vehicle, it’s beneficial to have the knowledge about various insurance plans. Make sure you understand exactly what you want and need before purchasing a car. The right coverage can save you time and money down the road. Visit us today in Lawrenceville, or simply contact us online with any questions you may have!

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