Gap Insurance
Insurance Glossary
Coverage that pays the difference between what is still owed on a vehicle loan or lease and the actual cash value the insurer pays after a total loss. Vehicles usually depreciate faster than loans are paid down, so a borrower whose car is totaled early in the term can still owe the lender after the claim settles. It is sold by insurers as an endorsement and by dealers and lenders as a separate product, and whether it also covers the deductible depends on the form.
This content is for general informational purposes only and is not insurance, legal, or financial advice. Coverage, exclusions, eligibility, and pricing vary by insurer, by policy, and by state, and only the policy documents control what is covered. Always confirm the details of any coverage with a licensed insurance agent or the issuing carrier before you buy.
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