GAP Insurance GAP Program Application for Coverage Loans 2025

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Gap insurance will only cover what is left on your loan after an insurance company pays out. In other words, no, it wont cover the down payment you made initially because it wasnt part of the loan amount.
GAP is supposed to cover the loss you would suffer if your loan balance is higher than the value of the vehicle. GAP is one of several optional add-on products such as extended warranties or credit insurance that a dealer will likely offer to you when purchasing or leasing a car.
When your loan amount is more than your vehicle is worth, gap insurance coverage pays the difference. For example, if you owe $25,000 on your loan and your car is only worth $20,000, your gap coverage covers the $5,000 gap, minus your deductible.
You can cancel gap insurance and request a refund if you sell or trade in your car, want to change insurance companies or no longer owe more on your loan than your car is worth. If your leased or financed car is totaled, your insurance pays out its actual cash valuewhich could be less than you owe on your loan.
You can check your current car insurance policy or the terms of your lease or loan to see if you have gap insurance. This type of coverage is usually offered as optional coverage by insurers or as an extra add-on by dealers, so its a good idea to find out if you already have gap insurance before you add more coverage.
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If youre still unsure if you have gap insurance, the best thing to do is check with your lender or leasing company. Theyll be able to let you know if a GAP Waiver Provision is part of your agreement.

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