McKayla Girardin, Car Insurance Writer
@mckayla_girardin
No, gap insurance usually does not cover your deductible. Gap insurance typically only pays for the difference between your totaled car’s actual cash value and the balance on your loan or lease, and it does not reimburse you for your collision or comprehensive deductible in most situations.
When Gap Insurance Can Cover Deductibles
Unlike gap insurance from most major insurance companies, gap insurance from Allstate can cover your deductible.
Additionally, gap coverage that was purchased from a vehicle manufacturer may pay for your deductible in certain states. For example, gap insurance from Toyota can cover up to $1,000 of your insurance deductible depending on your location.
Some credit unions offer gap insurance that includes coverage for your deductible, too.
When Gap Insurance Does Not Cover Deductibles
Gap insurance from a dealership, lender, lessor, or car insurance company generally does not cover your deductible. You only need to pay a deductible if you’re filing a collision or comprehensive claim for damage to your car, though. If you file a claim with the at-fault driver’s property damage liability insurance for a totaled car, you won’t need to pay a deductible.
To learn more, check out WalletHub’s complete guide to gap insurance.
People also ask
What is a collision deductible waiver?
A collision deductible waiver helps drivers save money on their deductible after an accident with an uninsured driver. Collision damage waivers typically apply only to accidents where an identified driver without insurance is completely at fault. A notable exception is California, where collision deductible waivers can be used in hit-and-run accidents.
When a Collision Deductible Waiver Is a Good Idea
Collision deductible waivers are similar to uninsured motorist property damage (UMPD) insurance, so a waiver is...
read full answerWhat does gap insurance cover?
Gap insurance covers the difference between your auto loan and the car's depreciated value. In other words, gap insurance helps you pay off your auto loan or lease if you're no longer able to drive your car due to it being totaled or stolen.
It’s important to note that gap insurance only pays when your car is totaled or stolen, so you cannot file a gap claim if you simply can’t make your loan or lease...
read full answerWhen does gap insurance not pay?
Gap insurance does not pay when a car needs normal repairs, when a car is damaged but not declared a total loss, or when a driver does not make the necessary payments. Gap insurance only pays when a car is totaled and there is a difference between the lease or loan balance and the car’s value.
It’s also worth noting that certain insurers limit the amount a gap insurance policy will pay, often to 25%...
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