Avoiding Auto Insurance Gaps: New York’s Continuous Coverage Requirement – The name says it all: gap insurance covers the gap – aka the difference between what you owe and what the insurance company pays – if your car is stolen or damaged. Generally, comprehensive or collision policies will pay for the vehicle’s actual vehicle value (ACV) in the event of an accident, theft or total loss. However, you are responsible for paying the difference between the ACV and the car insurance premium – and that’s where gap insurance comes in handy.
Gap insurance is optional insurance aimed at those who lease or finance a new car and owe more on the car than it was worth at the time of the incident. In short, gap insurance covers the difference between the car loan amount and what the insurance provider pays after you apply. Sometimes the amount you owe on the car is more than the actual amount of the loan. This is often known as bad equity, or delinquency on your car loan.
Avoiding Auto Insurance Gaps: New York’s Continuous Coverage Requirement
In this article, we’ll look at gap insurance, why you need it, and how you can buy it from your insurer at low prices.
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Although having gap insurance can give you a certain degree of protection – especially by allowing you to walk away from an accident or theft with less financial responsibility – not everyone needs gap insurance. In fact, you are only eligible if you bought your car with a loan or if you have a lease. And even if you qualify, you don’t have to have gap insurance. Your car, your choice!
That said, if you’re considering buying gap insurance, you’ll need to show proof of old car insurance. This is a prerequisite.
One important point: once you’ve paid off the loan until the car’s value is higher than what you owe, you don’t need to keep your gap insurance. After that, the gap protection may not make any difference if your car is lost or stolen.
And one last point: the price. Like any policy, gap insurance offers coverage at a price. Gap profit marks the additional monthly costs on top of regular maintenance costs and monthly insurance premiums on your car insurance.
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Chances are you already have gap insurance and don’t even realize it! It is very important to confirm whether you have gap coverage or not before purchasing a new auto policy, to save yourself time and money.
How can you already have gap insurance? Well, it is offered as optional coverage by most car insurance providers, and can be added by car dealers.
So if you are not sure whether you already have gap insurance or not, you will want to read about the car insurance policy that is available and rent or borrow money. You can also contact your car insurance provider or the car dealership where you bought the car.
Your current lease or loan documents may include this information, so check your lease documents. Some rental agreements include gap insurance as a standard feature without a separate fee. But in most cases, you will need to pay extra for gap protection if you buy it through a rental company.
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Your lease will detail if you already have gap insurance through your dealer or not. This is the best way to know for sure if you need to invest in a different policy.
If it is not mentioned in the papers, you can buy it anytime after leaving the car insurance company. When it comes to gap insurance, however, the earlier you buy, the better. In most cases, you should get gap insurance right after buying a new car.
If gap insurance is not included in the lease or loan agreement, then you should check with your car dealer to see if it is included with them. Many dealers strongly advise new car owners to buy gap insurance as soon as they buy a new car.
Your dealer can recommend a reliable service provider for gap insurance and can help you get started. As with any policy purchase, be sure to shop around to get the best deal. You may not get discounts on gap insurance, but you can avoid paying high premiums.
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FYI: car dealers often charge for gap insurance when you pay for a car. After all, dealers aren’t the only place to get gap insurance if you don’t have it. Usually, it is available from your car insurance provider, and this is usually a good budget option. And there’s always a third door: switch car insurance providers altogether!
We recommend that you contact your insurance agent to get all the information you need to determine which course of action is right for you.
Since gap coverage is optional (unless required by your dealer) and is usually added to your existing car insurance, you don’t have to go out of your way to buy it today. That said, if you decide to buy gap insurance, it’s best to do so right after buying or leasing a car. Of course, we highly recommend shopping around for the best deals.
Marble’s insurance comparison tool allows you to browse, compare, and buy the best and cheapest car insurance policies, which you can buy with gap coverage included. Plus, you’ll earn rewards while managing your insurance policies and browsing online providers through Marble. Sign up today to keep your car protected! Posted by Lauren Ward Posted by Lauren WardArrow Right Insurance Contributor Lauren Ward has nearly 10 years of experience writing for insurance sites such as , The Simple Dollar, and Reviews .com. He covers auto, home ownership, life insurance, and other topics in the personal finance industry. Contact Lauren Ward by Email Lauren Ward
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Edited by Lisa McArdle Edited by Lisa McArdleArrow Right editor, Insurance Lisa McArdle is an insurance editor who joined the team in 2023. She has over 15 years of experience writing, editing and managing content for a variety of industries, including insurance, automotive issues. and pop culture. Connect with Lisa McArdle on LinkedIn Linkedin Lisa McArdle
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