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The 411 on Gap Insurance

September 23, 2020
Author: Liz Giannetti

In our quest to always save you money on insurance, this month we’re covering gap insurance. You may ask, what is gap insurance anyway? In short, it covers the gap between what you owe on a car loan or lease and the current market value of the vehicle.

When you buy or lease a new car or truck, the vehicle starts to depreciate in value the moment it leaves the car lot. Let’s say you buy a $30,000 car, you drive it off the lot and now you’re driving home and it’s only worth $26,000. If you total that car, there isn’t enough money to cover the loan amount, because standard auto insurance policies cover the depreciated value of a car.

Many times, when you’re in the finance department of the auto dealer, they’ll tell you that you have to have gap insurance, and they conveniently sell it right there. But stop and remember your friends at Titan Insurance Services before you buy the dealer’s gap coverage, because 95 percent of the time, it will be less to purchase gap coverage through your insurance company. We can price it out for you, and we’ll let you know what the better deal it. It usually ends up being $1-$2 a month, and some carriers include it, like Safeco’s Ultra insurance package.

And when you’re in the new car market, always feel free to give us a call and we can price out what the new car will do to your insurance premiums.