Buying Cheap Auto Insurance in California – Do I Need Gap Insurance?
One of the reasons choosing an auto insurance policy seems so complicated is because of the many options available. Not only must you settle on an insurance provider and a particular type of policy, you also need to consider options such as gap insurance. Gap insurance covers more than the average insurance policy and is necessary for people leasing their vehicles or people who made small down payments when purchasing their cars. Gap insurance covers the amount of money not covered by traditional insurance if a leased or financed vehicle is totaled or stolen. This is essentially the “gap” between the coverage and financed amounts.
When a vehicle becomes un-drivable before the amount financed to purchase it is paid in full, there is little recourse for the financer. Essentially, if you total your car and still owe several thousand dollars on the car loan, the bank expects you to pay off this amount of money, regardless whether you are still driving the car. If your cheap auto insurance in California does not cover the total amount owed for your car, you need gap insurance. Some lease agreements include a gap waiver, but some do not. When signing your lease, verify your obligations and determine if you need gap insurance in addition to regular coverage.
There are several important things to remember when purchasing gap insurance. First, it can be purchased at any time. Most people choose to purchase it when they sign their lease or finance their vehicle, but there is no law requiring this. Gap insurance is additional protection, so if you decide you need it a few months after getting a new car, it is still available.
Those involved in the lease of a car must be in compliance with their lease at all time for gap insurance to be valid. If you break your lease, you lose your coverage. Most lease contracts require drivers to carry collision and comprehensive coverage at all times, but some do not. You need to know that your gap insurance might not be honored unless you carry collision and comprehensive coverage. Do not assume you are safe just because your lease agreement does not have this requirement.
Finally, be sure you follow all of the instructions given to you by your insurance carrier. You might need to make payments following the event until the gap insurance kicks in. If you stop making payments it can invalidate your gap insurance, ultimately costing you a lot more than one or two additional car payments, so be sure to follow the requirements of the policy. Compare auto insurance , cheap auto insurance in California is not enough for some drivers, but gap insurance can help protect you from financial strife.