How do I add gap insurance to my existing auto insurance policy?
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Asked July 27, 2015
A standard auto insurance policy includes bodily injury and property damage liability, as well as other coverages as dictated by the state where the policy is purchased, such as personal injury protection or medical payments. Gap insurance, like collision coverage or comprehensive insurance, is a rider policy that can be easily added to any policy as the need arises.
Gap insurance is only necessary on a car that is being leased or financed. The purpose of the coverage is to pay for the difference between your loan value and the book value of the car if the vehicle is stolen or totaled. The policy does not pay out to the policyholder, but goes directly to the lending agency or lien holder. Even though you cannot receive a gap insurance settlement personally, it can save you a tremendous amount of out of pocket costs that would otherwise be your personal responsibility.
To add gap insurance to an existing policy, all you have to do is contact your insurance agent. He will need to know the amount of the loan and the current balance, and can determine the amount of gap coverage you will need after comparing the loan value to the current book value of the vehicle. The cost of gap insurance quite affordable, especially when you consider that the alternative could involve paying thousands of dollars out of pocket to pay off a loan on your car if it becomes totaled.
Alternatively, you can shop online for a new insurance policy that includes gap insurance using a free online car insurance quote. Add gap coverage into the policy you design online, and then compare the cost of the policy between many different car insurance companies from the same website. Shopping for car insurance online, even when it includes gap insurance, can not only save you time and effort but save you hundreds of dollars a year in premium costs as well.
Answered July 28, 2015 by BlockO