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Personal Auto
Gap Insurance
Also known as: loan/lease gap
Coverage that pays the difference between what you owe on a financed vehicle and what insurance pays out when it's totaled.
When you finance or lease a vehicle, you owe the lender the loan balance. If the vehicle is totaled in the first few years, the insurance company pays the actual cash value — which is often less than the loan balance because cars depreciate fast. Gap insurance pays the difference. Strongly recommended for any financed vehicle in the first 2–3 years of the loan.
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