What Does Gap Insurance Cover?

2020 Cadillac XT5

There are many different types of insurance that Astoria area drivers can purchase to cover themselves and their vehicles and gap insurance can be an important option, but what does gap insurance do? Let’s discover more about this type of coverage.

Gap Insurance Basics

If you live in the Great Neck area and you’ve decided to purchase a new or used vehicle from City Cadillac in Long Island City, your first order of business is to arrange financing and insurance coverage, but which insurance should you opt for? Should you choose gap insurance – an optional insurance plan that provides coverage for the difference in value between the actual cash value of your car and the amount that is owed on the loan – or not?

Instances Covered by Gap Insurance

  • Stolen Vehicle
  • Fire Damage
  • Vandalism Damage
  • Vehicle Accident
  • Hurricane, Tornado, Storm Damage, Flood

Instances NOT Covered By Gap Insurance

  • Gap insurance only works when attached to an active comprehensive/collision policy.
  • Aftermarket equipment that is not factory-installed isn’t covered.
  • Gap insurance is NOT “replacement cost insurance”, so you may not be able to recover all of the loss in an accident.
  • Additional products such as extended warranties that were attached to the loan aren’t covered.
  • Overdue lease or loan payments, financial penalties, and security deposits are excluded.

Do I Need Gap Insurance Coverage?

Not all Brooklyn drivers need gap insurance coverage but in cases where it’s needed, it can be a financial lifesaver. Those circumstances where gap insurance can be a benefit include:

  • Purchases where there is a small or no down payment.
  • Loan arrangements that extend beyond 48 months.
  • High mileage commutes.
  • Lease agreements.
  • For vehicles that depreciate faster than average.

Additional Financing and Insurance Questions

We hope that we’ve answered your question, “what does gap insurance cover?”, but we realize that Long Island City drivers may need more information. Feel free to contact our finance department if you need clarification on financing or maybe more specific information related to “what does gap insurance do?”

If you’ve already found the vehicle in our inventory that you’d like to purchase, then apply for financing immediately and our professionals will begin the search for the most affordable loan for your budget, and you can also value your trade-in if that’s an option for you. At this point, you can have a conversation on which insurance coverage works for you and whether gap insurance might be necessary.

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