How much does gap insurance usually cover? This question is about Gap Insurance Guide

Gap insurance usually covers the amount still owed on your loan or lease after your insurance pays your totaled vehicle’s actual cash value. If your insurance covers $30,000 for your totaled vehicle, but you still owe $4,000 on the loan or lease afterward, gap insurance will cover the $4,000 remaining balance. How Much Gap Insurance Will Cover The limit to how much your gap insurance policy will cover is usually dictated by your vehicle’s value and how much you owe on your loan or lease. Otherwise, gap insurance typically does not have any maximum limit. Some car insurance companies offer loan/lease payoff coverage, which is similar to gap insurance, but it typically has a maximum coverage amount of 25% of the vehicle’s value. High-end vehicle manufacturers, like BMW, Porsche and Bentley, may limit their gap insurance payout to $50,000 or 150% of the vehicle’s value. Not every manufacturer limits how much gap insurance can cover. To learn more, check out WalletHub’s guide to gap insurance.

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How much does gap insurance usually cover?

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This question is about Gap Insurance Guide

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McKayla Girardin, Car Insurance Writer

@mckayla_girardin • 02/15/22 This answer was first published on 02/15/22. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

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Gap insurance usually covers the amount still owed on your loan or lease after your insurance pays your totaled vehicle’s actual cash value. If your insurance covers $30,000 for your totaled vehicle, but you still owe $4,000 on the loan or lease afterward, gap insurance will cover the $4,000 remaining balance.

How Much Gap Insurance Will Cover

The limit to how much your gap insurance policy will cover is usually dictated by your vehicle’s value and how much you owe on your loan or lease. Otherwise, gap insurance typically does not have any maximum limit.
Some car insurance companies offer loan/lease payoff coverage, which is similar to gap insurance, but it typically has a maximum coverage amount of 25% of the vehicle’s value.
High-end vehicle manufacturers, like BMW, Porsche and Bentley, may limit their gap insurance payout to $50,000 or 150% of the vehicle’s value.
Not every manufacturer limits how much gap insurance can cover.

To learn more, check out WalletHub’s guide to gap insurance.

Answer Question

What 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...

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What is not covered by gap insurance?

Gap insurance does not cover routine maintenance, a damaged car that is not declared a total loss, or missed car payments. Gap insurance covers the difference between a car’s actual cash value and the balance left on the loan or lease if the car is totaled or stolen. This coverage is not required by law, but some lenders and lessors require it for a financed car.

What Gap Insurance Does Not Cover

The total...

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How much does gap insurance cost?

Gap insurance costs around $3 per month when you add the coverage to your car insurance policy. When you purchase coverage from a car dealership instead, a gap insurance policy will cost a total of $400 to $700 in most cases.

A gap insurance policy covers the difference between what a leased or financed car is worth and how much the driver owes Like any other type of insurance, the cost of gap insurance varies...

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