Gap is short for “guaranteed assets protection”. This optional type of auto insurance in Georgia is often discussed in relation to newer cars. Georgia gap coverage protects a driver’s loan obligations in the event of an accident or other peril that results in a total loss. The insurance payout is lower than the outstanding loan on the vehicle.
What is gap insurance?
gap insurance covers any difference between what you receive from your car insurance company and the amount that you owe on the loan. The typical auto policy will pay the vehicle’s current market value or the ” depreciated value” which may exceed the outstanding loan. This is especially true if you’re purchasing a new vehicle. It will lose a lot of value once it leaves the lot.
What is gap insurance in Georgia?
Gap insurance doesn’t guarantee full compensation for all circumstances. It is crucial to understand how and when gap coverage works in Georgia.
Gap insurance is not available for all vehicles. It typically covers newer vehicles as well as vehicles up to one year old. Gap coverage is often purchased with the car loan. For example, gap coverage does not cover situations in which you owe more because you trade in a vehicle that you owe money.
Gap coverage is a very limited form of car insurance coverage. It does not cover the cost of securing replacement coverage for your car. It does not cover rentals or towing and it is not an extended warranty. The Gap does not cover the difference between the loan amount of the car and its value at the time the claim is made.
What are the best times to use gap insurance?
When your vehicle is totaled, gap insurance will only be available. Gap insurance is typically activated when your vehicle is totaled by your insurer. However, other events may trigger gap coverage.
If your car is lost or stolen, or if it is damaged in an earthquake or other natural disaster, you can recover its market value just as you would for a vehicle that has been totalled in an accident. Gap coverage is available if the amount is less than the outstanding loan.
Gap insurance vs. other coverages
Gap insurance is a limited type of coverage that covers a particular situation. It should not be confused or compared with liability coverage, collision coverage, and comprehensive. These two forms of coverage protect you financially if your car is damaged beyond repair.
Georgia: Where can I buy gap insurance?
Gap insurance can be purchased from many of the best Georgia insurance agencies. These companies often offer gap insurance as an option because car buyers finance their purchases.
Both dealers and finance companies will often sell gap insurance because they have a financial interest in the vehicle. By statute of the Georgia insurance ministry, gap insurance is explicitly excluded. These sales are therefore not restricted.
Georgia Gap Insurance Companies
Gap insurance is not offered by every Georgia auto insurance company. Geico does not offer policyholders gap coverage. Georgia’s largest auto insurers, by market share, offer gap coverage. Dealerships and finance companies also offer this coverage. Here are some examples:
- AAA: If the insured vehicle is fully covered by collision and comprehensive coverage, the carrier will offer gap coverage. AAA will waive up to $1,000 of your policy deductible if your insured vehicle is declared total loss.
- Progressive – Progressive also offers gap insurance to those who have collision and comprehensive coverage. Progressive provides “loan/lease payment coverage” at an average monthly cost of $5.
- State Farm – Although State Farm doesn’t offer gap coverage, it does offer an ” Payment Protector” option that provides gap protection for those who have a State Farm car loan. Even if another carrier provides the full coverage, a buyer can still be eligible.
Many dealers offer Georgia gap coverage, such as:
- Cobb County Toyota – Gap coverage is available as an option to an auto loan. This will increase the monthly loan payment by a small amount.
- IQAutos: IQ has a presence in Georgia and other areas across the country. This dealership offers many gap options as part its sales process.
Questions frequently asked
What is the cost of gap insurance?
Gap insurance can be obtained from your car insurance company or your vehicle lender. You will typically pay more through your dealer or lender than if you bought the car directly from the dealership. Talk to your auto insurance company first. They may offer gap coverage at a nominal annual fee.
Georgians need gap insurance
The Georgia insurance laws, regulations do not include Gap insurance. It is not required by law. This being said, it is recommended that you research this option when purchasing coverage for a new vehicle.
Can I cancel my insurance coverage for gap?
If you decide that gap insurance is not necessary, you can usually cancel it. If your outstanding loan balance is less than the vehicle’s actual value, this could be possible. Check with your gap insurance provider for cancellation requirements.
