Home › Answers › What is gap insurance?
Gap insurance is a type of insurance that covers the difference between the actual cash value of a vehicle and the amount still owed on the loan or lease if the vehicle is totaled or stolen. This type of insurance is often recommended for people who put little to no money down on a vehicle, as they may owe more on the loan than the vehicle is worth. Many lenders in South Florida require gap insurance for loans with high loan-to-value ratios. Typically, lenders consider the loan-to-value ratio when determining whether to require gap insurance. Often, gap insurance can be purchased from the lender or an insurance company, and the cost is usually added to the monthly loan payment. It's essential to review the terms and conditions of the gap insurance policy to understand what is covered and what is not. To learn more about gap insurance and how it applies to your situation, you can start by contacting Elite Edge Auto Broker at (954) 907-2386 or by filling out the 60-second Pre-Qualify form at eliteedgeautobroker.com/PreQualify.
Do I need gap insurance if I have full coverage?
Having full coverage insurance does not necessarily mean you have gap insurance, as full coverage typically only covers the actual cash value of the vehicle. You may still need gap insurance if you owe more on the loan than the vehicle is worth.
Can I purchase gap insurance at any time?
Typically, gap insurance can be purchased at the time of loan origination, but some lenders may allow you to purchase it later. It's best to check with your lender to see if they offer gap insurance and what the requirements are.
Is gap insurance required in Florida?
Gap insurance is not required by law in Florida, but many lenders require it for loans with high loan-to-value ratios. It's essential to review your loan terms to determine if gap insurance is required or recommended.
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