GAP (total loss insurance)

GAP (total loss insurance)

Standard motor insurance isn't always enough to fully cover the cost of replacing a car or completing repayments under a finance deal. 
 

In the event that a car is stolen or totaled as a result of an accident, your clients will need financial support to meet the additional costs. GAP (Total Loss Insurance) for automobiles complements motor vehicle coverage and helps customers pay the costs incurred when their car is stolen or in an accident.
The GAP (Total Loss Insurance) has three variants:

• In the variant linked to Financing, the difference between the balance of the financial agreement and the insured value is paid

• In the Index variant, a defined percentage of the market value is paid before the loss

• In the Invoice value variant, the difference between the invoice price and the insured value is paid.

Advantages for you

Since there have never been so many cars owned and many households own multiple vehicles, this product is very attractive to customers.
This policy can bring a new revenue stream to your business and complement the suite of products you already offer to your customers.

Advantages for your customers

For most customers, purchasing a vehicle is a significant financial commitment. Therefore, it is vital to provide them with security so that they can pay them. Thanks to our product, your clients can be sure that they will be able to pay the amount corresponding to a financial agreement or acquire a new similar car in the event that their vehicle is stolen or declared a total loss.
The product can be tailored to your customer's specific situation. The three variants address the most common scenarios for car owners, so the customer can choose the one that best suits their circumstances. What Is Gap Insurance, And Why It’s Essential For Your Vehicle

What is Gap Insurance Coverage?

For many people, the only way they can afford to buy a new car is to get financing. Unfortunately, this can leave you vulnerable in a situation where you owe more than the car is worth if it is stolen or totaled. A product called GAP (Guaranteed Auto Protection) insurance can prevent you from facing financial difficulties in this type of scenario. Feature

GAP insurance will pay any extra money you may still owe the finance company in the event that your car is totaled or stolen. It protects against a situation where you are "upside down" in your car loan, which means that you owe more than your car is worth. GAP insurance is not a legal requirement, although a leasing company may require you to carry it to obtain a car lease.
Example

Here is an example of how GAP insurance works. Suppose you buy a new car and get financing in the amount of $20,000. Ten days later, you are involved in an accident where the vehicle is totaled. According to Edmunds.com, write off a vehicle by about 20 percent as soon as you drive off that lot, so your insurance company can place the vehicle's value at only $16,000. GAP insurance will pay the extra $4,000 that you still owe on the vehicle.
Meaning

GAP insurance can be a financial lifesaver in a situation where you are trading in a car that is still being financed for a vehicle that you are also financing. In these situations, the amount that you are financing is often increased because your old car loan can be rolled into your new loan. If you don't take out GAP insurance with the new loan, you could be on the hook for several thousand dollars if your car is totaled or stolen. Add Expert Insight

According to Edmunds.com, there are a variety of other situations where GAP insurance is recommended. If you are financing your car for 72 months or longer or making a down payment of less than 20 percent, GAP insurance is a good idea because the total amount you are financing will likely be high. It also makes sense when financing a vehicle that writes quickly, such as a luxury car.
Considerations
p If you are in the market for GAP insurance, start by contacting your own insurer to see if it provides coverage. If it doesn't, you might want to go around with other airlines. You can also get it through car dealers, although this is usually not the best option, as this method often results in the highest premiums.