What is Gap Insurance?

Man on phone from car accident


When purchasing a new car, you want to make sure you have the proper protection in place to safeguard your investment, but with so many optional insurances it can be hard to decide what you really need. If you’re looking through plans and wondering, “What does gap insurance do,” you’ll want to read through this guide put together by Middletown Honda!

What Does Gap Insurance Do?

Gap insurance is designed to cover the gap between the owed amount on the car and the true cash value of the car at the time of an accident, vandalism, or theft. This can protect you from being in a position where you owe money on a vehicle you can no longer drive.

What Does Gap Insurance Cover?

While gap insurance does cover a variety of issues related to your vehicle, it does not cover bodily injuries or damage to property. With that, here’s exactly what gap insurance does and does not cover:

Gap Insurance Covers:

  • Theft
  • Vandalism
  • Accident
  • Fire
  • Acts of nature (tornado, hurricane, flood, etc.)

Gap Insurance Does NOT Cover:

  • Extended warranties
  • Deductible (though some gap insurance policies allow this)
  • Engine failures and other mechanical repairs/malfunctions
  • Death

The main takeaway is that gap insurance is meant to cover total loss in the event of an accident. While it remains an optional coverage, it’s worth considering if one of the covered situations above could put you in a bad financial position.

Is Gap Insurance Required?

No, unlike liability insurance, gap insurance remains optional. Still, it’s highly recommended that you discuss the pros and cons of gap insurance for your situation when going through your financing and insurance options. If you have additional questions about gap insurance coverage or cost, reach out to the Middletown Honda finance center.

Stay Informed on Insurance Options at Middletown Honda

It pays to be a well-informed consumer during while car shopping around Goshen. If you have other financing or insurance questions, such as whether you need full coverage insurance on a used car, check out our car buying tips or drop by Middletown Honda to speak with one of our financial experts!

More From Middletown Honda

  • All New 2022 Honda Civic Type R

    All new Honda Civic Type R arrives in Tokyo Auto Salon. Rumors say this vehicle will be available to the public late 2022. There isn’t much spread about the new updates and features of this Type R. But there has been hints of it having some test runs and production will happen soon. Its just…

  • 2023 HR-V Teaser

    2023 HONDA HRV. WHAT’S TO COME HONDA PUT OUT A TEASER FOR THE NEW 2023 HONDA HRV. In 2023 the Smallest crossover from Honda will be completely redesigned. With the same 4 models, LX, Sport, EX, EX-L they all will be similarly priced from previous, and will be expected in Spring of 2023. Hoping for…

  • One Door Closes… A New One Opens

    New Year, New Car. 2022 is just around the corner. Looking for a fresh start to the new year? The New 2022 Pilot is as fresh as it gets with two new models. The 3 row SUV entry models have been replaced. So out with the EX and LX and in with the upgraded Sport…

Search
Contact
Chat
Search
Contact Us
Chat
DI Move Pixel
Middletown Honda 41.4607833, -74.3744693.