What is Gap Insurance?

Tiny car with insurance documents
When you’re purchasing a new car from Toyota of Louisville, you’ll have to consider various financing and insurance options. One of the many optional insurance coverages you can choose from is gap insurance. But, what does gap insurance do? Gap insurance covers the gap between the amount owed on the car and the true cash value of the car at the time of an accident. Find out more about what exactly gap insurance covers and how it can meet your driving needs in New Albany. Then, learn more about liability insurance and why you need it to drive in Kentucky.

What Does Gap Insurance Cover?

Gap insurance covers a variety of vehicle-related issues you might encounter in the Elizabethtown area. However, you should keep in mind that gap insurance is only meant to cover vehicle damage, not property or bodily injuries. Here’s exactly what gap insurance does, and does not, cover:

Gap Insurance Covers:

  • Theft
  • Fire
  • Vandalism
  • Accident
  • Acts of nature (tornado, hurricane, flood, etc.)

Gap Insurance Does NOT Cover:

  • Deductible (though some gap insurance policies allow this)
  • Engine failures and other mechanical repairs/malfunctions
  • Death
  • Extended warranties

Ultimately, the main takeaway from the question, ‘what does gap insurance do,’ is that it covers total loss in the event of an accident. Although this coverage is optional, it is definitely worth speaking to your insurance company about what it can offer you.

Is Gap Insurance a Necessity?

While Lexington drivers don’t need gap insurance, it’s highly recommended you choose gap insurance when buying a new car and comparing different insurance plans and financing options. Gap insurance is even more helpful if your dealership offers a plan that includes deductible coverage. This insurance will not only give you peace of mind when out on Louisville, but it will also help save you money in the event of an accident.

Contact Toyota of Louisville for Insurance & Finance Options

Whether you’re ready to purchase a new vehicle, or just started the searching process, it always helps to know about insurance plans. Contact us to find out your insurance and finance options so you can have the right coverage and save both time and money down the road!

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