Insurance Glossary

Gap Insurance

Pays the difference between what you owe on your car loan and what your car is worth if totaled.

Gap Insurance

When you total a financed car, your insurer pays its actual cash value — which may be less than what you still owe on the loan. Gap insurance covers the difference.

Worth considering if:

  • You put down less than 20%
  • You financed for 60+ months
  • Your vehicle depreciates quickly (EVs, luxury cars)

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