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What Does Gap Insurance Cover?

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After buying a new or used vehicle, you will face the task of selecting insurance coverage from a myriad of options, some of which are required and others are optional. Among the types of insurance available is gap insurance. So, what does gap insurance cover, specifically? What does gap insurance do? In simple terms, gap insurance covers the gap between what you still owe on your car loan and the value of your vehicle at the time of an accident. Discover how gap insurance will benefit you on the Houston roads with Baytown Hyundai.

What Does Gap Insurance Do?

When you opt for gap insurance, you’ll get coverage for a variety of issues that may crop up as you drive around Pasadena. Keep in mind, though, that gap insurance covers damage to your vehicle, not property damage or bodily injuries. Gap insurance applies in the following instances:

  • Accident
  • Theft
  • Vandalism
  • Fire
  • Natural disasters (tornado, hurricane, flood, etc.)

However, gap insurance does not apply to your deductible, engine failures and other mechanical issues, and extended warranties, among other circumstances. Feel free to connect with the finance center at Baytown Hyundai to determine what gap insurance will do for you.

Do You Need Gap Insurance?

As previously stated, gap insurance is not required, but it is highly recommended for drivers like you in the Beaumont area who have taken out a car loan. That’s because it is especially beneficial if your car is totaled or stolen, and you owe more on the loan than its depreciated value. According to Allstate, the following situations typically merit gap insurance:

  • You have an auto loan term that is longer than 60 months
  • You paid less than 20% of the vehicle’s total value on the down payment.
  • You lease your vehicle.

Explore Insurance and Finance Options at Baytown Hyundai

Get in touch with Baytown Hyundai when you begin shopping for a vehicle to ensure that you’re aware of all of your finance and insurance options, including gap insurance. The right coverage can save you time and money down the road. Our team is committed to setting you up for the optimal car buying and driving experience in the Friendswood area.

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