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Do I need Gap Insurance on my Auto Policy?!?

Gap or loan/lease insurance covers the difference between the value of the car at the time it is stolen or totaled and the outstanding loan amount. The standard auto policy covers only what the car is worth at the time of loss, even if you owe more on your car loan or lease. This is where Gap coverage comes in and pays the unpaid loan or lease balance the remains after the total loss settlement.

  With the low down payment deals that are being offered and the rapid depreciation of new cars, there   is a greater need to cover the loan or lease gap that may exist. 

Gap insurance is typically much less expensive on your auto insurance policy, averaging around $20-$30 a year. If you purchase it through the dealer or bank they may charge you hundreds of dollars and interest on the increased amount of the loan.  Most gap coverages on an insurance policy will not cover negative equity that is rolled into a loan from a previous vehicle.  If you have rolled over an outstanding loan balance into the loan for a new car, ask the dealer if their coverage will pick up the full loan value.

Give Richardson Insurance a call to find out more about Gap or loan/lease coverage.

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Richardson Insurance
205 Hanover St, Hanover, MA 02339 | Office: 781-826-5161 | Fax: 781-829-9287
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