WalletHub, Financial Company
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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% of the car’s value. Policies with a 25% cap are usually called “loan/lease coverage.”
Gap Insurance Won’t Pay For:
- A car’s reduced value after an accident that does not total it
- Normal repair needs
- Replacement parts
- A rental car after an accident
- A new car
- The gap between the car’s value and the loan or lease balance after engine failure
- Extended warranty coverage that was included in the original loan or lease balance
- Money included in a loan or lease balance that was rolled over from a previously financed car
- Injuries, lost wages, or damage to other people’s property from an accident
- Car payments missed due to unemployment, injury, disability or death
In addition, many gap insurance providers will not pay your collision or comprehensive deductible, though it depends on the specifics of your policy.
Since gap insurance has so many limitations, it is only intended to be used in conjunction with liability, collision, and comprehensive insurance. For more details, check out WalletHub’s information on gap insurance and whether it’s worth buying.
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What's happening when the gap insurance told me they will pay the difference but they didn't pay nothing ?