In Florida, a gap insurance policy for auto coverage will work just like any other states Gap insurance program, but not all states offer this type of coverage. This type of insurance is considered a type of credit insurance and will pay the differences between the vehicle payout and what is owed in the event there is an accident. Florida does not require this type of coverage, but if it is in the fine print of your lease or loan you may need it. One phrase that comes to mind when thinking of getting this type of insurance and that holds truth is, “Better to have had it and not need it than than not have it and need it”. The ultimate question of whether you need this insurance or not should be because you have researched the insurance and it fits your needs, as well as talking to your agent to make sure you understand completely what Gap insurance offers and doesn't offer. With this type of insurance the premiums are low and usually within budget of most consumers. So for peace of mind and a source of complete coverage for your auto this policy is just what you need.
Here are some Questions & Answer:
What Does it Cover?
As a general rule Gap car insurance is optional but it works like your basic comprehensive and collision insurance on your vehicle. You do have to have basic car insurance in order for Gap insurance to payout. Some Gap insurance will cover deductibles, but most do not so you should discuss this first with your agent. Other total losses covered are theft, fire, accident, tornado, hurricane, flood and vandalism.
What is Excluded?
If you don't have basic car insurance you will be excluded. Also equipment that is not installed in factory. It will not cover down-payments or trade-ins. This type of insurance is not replacement cost insurance. It won't cover any past due payments on loans or leases and it will not cover any penalties or security deposits if you lease your vehicle. You should remember this is just a partial list you should discuss this with your agent.
If I am at Fault will Gap Insurance cover it?
Yes, Gap insurance coverage will give you protection no matter the type of loss you have and if you owe more money than the value of the car. Your comprehensive will cover the damages and if your vehicle is totaled with a monetary difference on your loan Gap insurance will pay the remaining balance of the loan regardless of who is at fault.
When and Where can I buy this type of policy?
Most of the major insurance companies offer this type of insurance and a few offer different type of this kind of insurance. Some states do not allow this type of insurance so check with state laws. The best way to get your questions answered is to discuss this with an agent. Insurance is changing constantly and you should get to know your agent so they know your needs and can help you find solutions.
How Much is This Coverage?
This type of coverage from an insurance company will cost a few extra dollars a month, but always remember rates can vary. You can also get this type of coverage when buying from a dealership, but these are usually more expensive and require upfront fees that are rather high.
Does it Cover Mechanical repairs?
This only covers you in the event of a total loss from an accident that is covered.
Does it Cover Death?
No it does not cover medical expenses, lost wages, funeral costs or bodily injuries. It only applies to losing your vehicle.
When buying a new car it is a good investment to purchase gap insurance coverage in the event your car is totaled or stolen. While your insurance policy will pay for the cars value at the time of the accident, they will not pay anything above that value. This means that there could be a difference you will need to pay out of pocket. The amount valued will be determined by the actual cash value, which is equal to the cost of the car new minus depreciation (age, physical condition, mileage, etc.). Not having this type of insurance can leave you without a car and a huge bill you don't need. In just a year of ownership your car can depreciate by thousands of dollars. Less than you paid for it leaving you with a balance that can be difficult to financially handle. Adding gap insurance is a good buy and one thing you should keep in mind is that you may only need it for a few years until the gap between what is owed and the value of the car closes.
In today's world with so much financial worries one thing that is important to many is their cars. Vehicles take us to everything from work to family outings and with today's automobiles deprecating at rapid rates this type of insurance is reassuring many families and individuals in knowing they are covered. The first four years of Gap coverage is very important because it covers the difference between what is borrowed and actual value of a vehicle in the event of an accident. For many this will mean the difference between being able to get a replacement vehicle or simply not. Deciding how much insurance one needs is tricky. First you should always check to see how much the law in your state requires and you should consider enough coverage to protect your assets and yourself. You also need to find the right kind of plan to fit your budget. Shop around and check with other insurance companies to see which one will offer the best plan to fit your needs. Insurance is designed to protect you, your assets, other people and property when there is a collision, theft or natural disaster. The main question is, “Should I get this type of insurance” and if your buying a car on credit the answer is “Yes”.