GAP insurance is intended to pay you if a total loss of your vehicle occurs. Once this happens GAP insurance will pay the difference between the actual cash value of the vehicle and the current outstanding balance on your loan or lease.

Gap insurance is for car owners whose insurance does not pay the balance due on a vehicle when it's totaled. Kelley Blue Book determines the replacement value, but interest rates and loan terms may cause the balance due to be more than the blue book value.

Most new car dealerships are offering this GAP insurance policy when you purchase a new car. there are also some used car dealers that offer it as well, but check the book value of the vehicle first before you spend $200 on GAP insurance that might not cover anything because the value of the vehicle is low. Do you need SR22 Forms or would you like to compare rates on SR22 auto insurance? Learn some tips and tricks to reducing your auto insurance rates quickly and easily and how to file an SR22 online.