In addition to a house, a car is likely one of the largest purchases you will make in your lifetime. No one ever plans on getting into a serious accident and totaling their car or having a vehicle stolen, but unfortunately, these incidents do happen. There are two types of insurance coverage that can protect you financially so you’re not coming out of pocket to replace your car if the worst occurs.
Guaranteed Asset Protection Insurance
Guaranteed Asset Protection (GAP) insurance is a type of insurance that covers the difference between what you owe on your car loan or lease and the actual cash value (ACV) of your vehicle in the event of a total loss or theft.
For example, if you owe $25,000 on your car loan and your car is totaled, but the actual cash value of your car at the time of the accident is $20,000, then GAP insurance would cover the $5,000 difference between what you owe and what the car is worth.
It's important to note that GAP insurance only covers the difference between what you owe and the ACV of your car, and it doesn't cover things such as your deductible, unpaid loan or lease payments, or any other expenses associated with the loss of your car.
GAP insurance is typically offered as an optional add-on to your car insurance policy, and it may also be available through your car dealership or lender.
We recommend talking with your insurance agent about options for GAP coverage before signing off on the dealer/lender form as your agent may be able to provide coverage at a lower cost.
It’s also worth noting that GAP coverage isn’t just for cars. You can get coverage for other types of vehicles such as the examples below and have everything listed on one policy.
The cost of GAP coverage is typically very low compared to the thousands of dollars it could save you if a total loss or theft occurs.
Contact Wallace & Turner to discuss GAP insurance and have financial peace of mind.
New Car Replacement Insurance
As an alternative to GAP, you may consider purchasing New Car Replacement (NCR) coverage because NCR also typically includes GAP.
New Car Replacement is a type of car insurance that covers the cost of replacing your vehicle with a brand new one of the same make and model if it's totaled in an accident within a certain time frame, usually up to one or two years after purchase.
This coverage is available as an add-on to your car insurance policy, and it may also be included in certain comprehensive auto insurance policies.
New Car Replacement coverage protects you from the financial loss that can come with having a new car totaled in an accident. Without this coverage, you would only receive the actual cash value of your car at the time of the accident, which may be significantly less than what you paid for it or what it would cost to replace it with a new vehicle.
Be aware that New Car Replacement coverage typically has restrictions and limitations, such as a maximum coverage amount, a limit on the number of years or miles the car can have at the time of the accident, and a requirement that the car be insured for its full value.
Comprehensive Coverage for Your Vehicles
Wallace & Turner works with a range of carriers that can provide GAP and NCR coverage in addition to numerous other coverage benefits. As one example, Cincinnati Insurance offers Capstone Auto Coverage which allows you to insure all your personally owned vehicles under one policy, with features such as:
New car replacement for qualified autos
Full agreed value of the auto with no surprises in the event of a total loss
Transportation expense for repairs after a covered loss
Roadside assistance
Trip interruption expenses
And more
Questions about GAP Insurance or New Car Replacement Insurance? Contact Wallace & Turner at 937-324-8492 or online here.
