What Are the Benefits of Buying WA Auto Insurance with GAP Coverage?
Purchasing an auto insurance policy that includes guaranteed auto protection (GAP) can help motorists pay off their car if it's considered a total loss after a serious accident. If a car is totaled, GAP coverage pays the difference between the current market value of a policyholder's automobile and the amount that is still owed to the lender. It's referred to as GAP insurance because it's designed to cover this monetary "gap."
If motorists with optional Washington car insurance are involved in an accident, their collision coverage will generally pay for the damages to the insured automobile. However, if that vehicle is considered a total loss, the collision coverage will only pay the current market value of the vehicle. If motorists owe their lender more money than the vehicle is actually worth, they will still have to pay the outstanding loan amount.
For example, if at the time of an accident a policyholder's loan balance on a car is $19,000 and the current market value of the car is $16,000, the motorist would still have to pay the remaining $3,000 for the totaled automobile. With GAP insurance, the remaining $3,000 in the above example would be covered by the insurer. Without this added protection, motorists may find themselves still paying for a car that has been destroyed in an accident.
Although potentially helpful after an accident, GAP insurance does not cover any interest that the vehicle owner has accrued. Additionally, GAP will not cover late fees or missed payments on a totaled automobile.
In the Evergreen State, insurers are not required by law to offer GAP insurance. However, state law mandates that every WA coverage provider that writes comprehensive and collision coverage must provide this additional protection if requested by an insured who is purchasing or financing a new private passenger automobile.
It's often beneficial for motorists to buy WA automobile insurance coverage with GAP after purchasing a new car, especially if they bought it with no money down. Taxing and licensing fees could amount to thousands of dollars, meaning the driver is already "upside down"-meaning they owe more than the car is worth-soon after driving off the lot. To determine if GAP is necessary, Washington motorists are encouraged to research the actual cash value of their automobile.