Importance of Gap Coverage in Ashland Ohio

If you've recently financed a car in Ashland, Ohio, you may want to consider purchasing gap coverage. Gap coverage is designed to protect you from financial loss in the event of an accident or theft, and is especially important for those who owe more on their car loan than the actual value of their car. In this post, we'll explore the benefits of gap coverage for cars and how it can provide peace of mind for Ashland residents.

What is Gap Coverage?

Gap coverage for cars is typically offered as optional coverage by most auto insurance companies. It's important for those who lease or finance their cars because they often owe more on the loan or lease than the actual value of the car. Let's say you buy a car for $20,000 and finance it over a five-year period. After two years, the car is now worth only $10,000, but you still owe $14,000 on the loan representing a $4,000 gap. If the vehicle is stolen or totaled, your insurer would pay you $14,000 minus your deductible. Without gap insurance, you'd only receive $10,000. However, you still owe $14,000 on the loan. In this scenario, gap coverage will cover the difference of $4,000, so you won't be stuck with a big bill.

How Much Gap Coverage Do I Need?

When it comes to how much gap coverage you need, it depends on how much you owe on the car loan or lease. If you have a large down payment or have paid off most of your loan, you might not need gap insurance. However, if you are putting little to no money down or have a long loan term, gap insurance can be a valuable investment.

It's important to note that gap coverage is not the same as traditional car insurance. While traditional car insurance covers damages and injuries resulting from an accident, it does not cover the difference between the actual cash value of your car and what you owe on your car loan or lease. Gap coverage is designed to fill that gap and protect you from financial loss.

In addition, some insurance companies may offer discounts or package deals for gap coverage when purchased with other types of insurance policies. This can help you save money on your overall insurance costs while still ensuring that you have the coverage you need in the event of an accident or theft.

What to Consider When Purchasing Gap Coverage?

When considering gap coverage for your car, it's important to shop around and compare quotes from different insurance providers. Buying gap insurance from an insurance company may be less expensive than adding it to the vehicle loan, and you won't pay interest on your coverage! Not all insurance companies offer gap coverage, and those that do may have different rates and coverage options. You should also review the terms and conditions of the policy carefully to ensure that you understand what is covered and what is not. If you need help, contact us!

Overall, gap coverage can provide peace of mind for Ashland residents who are financing a vehicle. While we all hope for the best, accidents and thefts can happen to anyone, and financial loss can be devastating. Purchasing gap coverage can help protect you from that loss and ensure that you have the coverage you need in the event of an accident or theft. Call our office to find a policy with gap coverage that fits your needs and budget.