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No, gap insurance does not cover death, since it only pays for the difference between a car’s value and any auto loan or lease balance remaining if the car is declared a total loss. Gap insurance also does not cover medical bills, funeral costs, or car payments if the policyholder, a passenger, or another driver dies.
Gap insurance will make car payments if the car is totaled due to theft or an accident, but not if the owner is simply unable to pay. Generally, if a car’s owner dies, any co-signers or joint owners of the car will become responsible for the car payments. If there are no co-signers or joint owners, the car will become part of the deceased’s estate, or combined assets. The executor or administrator of the estate will then determine whether the estate can afford to continue paying the car loan or if the car will have to be repossessed by the lender.
On the other hand, liability coverage, personal injury protection (PIP), uninsured motorist coverage, and MedPay insurance all include death benefits in certain situations. For instance, if you are at-fault in a car accident that kills another person, your bodily injury liability coverage will pay for their medical or funeral expenses up to your policy limits, and vice versa. Similarly, PIP, which covers injuries that you sustain regardless of fault, includes death benefits that may pay for funeral expenses, medical bills, and loss of income. Uninsured motorist coverage and MedPay usually cover funeral expenses as well.
People also ask
How does gap insurance work?
Gap insurance works by covering the difference between the balance on a car loan or lease and what the vehicle is actually worth if it is stolen or declared a total loss. For example, if you owe $24,000 on your loan and your car is worth only $20,000 when it's totaled, gap insurance would cover the $4,000 gap. Purchasing gap coverage ensures that you don't have to make loan or lease payments for a car...
read full answer by WalletHub, Financial CompanyHow does gap insurance work after a car is totaled?
After a car is totaled, gap insurance covers the balance between what is owed on a driver’s loan or lease contract and what is paid to the lender by their insurance. A claim must be filed and verified before a gap insurance provider will make a payment.
How Gap Insurance Works After a Car Is Totaled
- The policyholder files a claim with their gap insurance provider as soon as the car is...
Does gap insurance cover engine failure?
No, gap insurance does not cover engine failure. Gap insurance only covers the difference between an auto loan or lease balance and the vehicle’s value, and it only covers that gap if the car is totaled in an event covered by comprehensive or collision insurance, or by the at-fault driver’s liability insurance.
Although gap insurance does not cover engine failure directly, it does apply if a car is totaled. Furthermore, engine damage from a crash...
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