Gap insurance can be purchased through an auto insurance provider such as Allstate, Progressive or Esurance, as well as through a car dealership, notes Esurance. Some lenders at banks also sell the insurance.Continue Reading
Gap insurance is often available as a supplement to insurance packages that have comprehensive coverage, and members with this coverage can usually just contact their insurance providers to find out the additional monthly fee. When car dealerships sell the service, the car's owner usually pays a fee at the time of request, and it's usually more expensive than when purchased through insurance companies, notes Esurance. Leased cars may include the coverage as part of the terms in the lease.
The main purpose of gap insurance is to protect the car owner or leasee from having to pay out-of-pocket costs if the insurance policy doesn't pay the full car's value in the event of an accident. This is especially problematic if a new car gets totaled and the person has financed or leased the car with many payments remaining. With gap coverage, the person can pay off the remaining lease or loan with the money awarded from the gap insurance. As the car gets older and the owner has fewer payments left, he may want to discontinue the gap insurance for financial reasons.Learn more about Insurance