Should You Add Gap Insurance to Your Auto Insurance Policy?

Nevada Insurance Enrollment Explains How Gap Insurance Protects You From Owing More Than The Value Of Your Car

LAS VEGAS - nvtip -- Imagine having a car declared a total loss because of an accident or theft, but you are still required to make payments on it. Though unfortunate, gap insurance can help.

Your Auto Insurance Policy Might Not Pay Off Your Car Loan

Gap insurance is optional auto insurance coverage that covers the difference between the actual cash value (ACV) and the amount owed on the loan of your car if your car is totaled or stolen. Standard auto insurance covers the current depreciated value of your car. If you're upside down on your loan, (owing more than the car's worth), then you could be forced to pay thousands of dollars for an unusable car.  This sadly happens all the time, every day!

We all know new vehicles depreciate in value the minute you drive it off the lot, and the value continues to decline following that moment. This is how most auto owners end up in that gap. While gap insurance isn't necessarily required, it can be a lifesaver in the event that your vehicle is totaled or stolen, and you owe more on your car than what it's worth.

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How Does Gap Insurance Work?

Let's say you bought a brand-new car for $20,000 and still owe an average of $14,000 on your auto loan when the car is totaled in an accident. Your coverage will pay up to the totaled car's depreciated value, assuming it's $11,000 and your gap insurance would pay the difference, which is $3,000 in this case.

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Nevada Insurance Enrollment
4260 W. Craig Road suite #150-A
North Las Vegas, NV 89032
(702) 898-0554

Nevada Insurance Enrollment
Shelly Rogers

Source: Nevada Insurance Enrollment
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