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What Does GAP Insurance Do?

When you buy a new Nissan for your commute in Houston, you’ll have a variety of coverage options to choose from when you insure your vehicle. Aside from the required liability insurance, drivers can choose to purchase GAP insurance as additional coverage in the event of an accident. What does GAP insurance do? In essence, GAP insurance covers the “gap” between the amount you owe on a vehicle and the cash value of your car at the time of a total loss accident. Read along with the South Houston Nissan finance team as we discuss what GAP insurance covers and whether or not purchasing GAP insurance is worth the extra cost. 

What Does Gap Insurance Cover?

As we mentioned above, GAP insurance covers the “gap” between what you owe on a vehicle and what its cash value is at the time of a total loss accident. For example, if you owe $10,000 and your vehicle is worth $8,000 at the time of a total-loss accident, GAP insurance will cover the remaining $2,000 that you owe. This way you’re not paying for a vehicle you can no longer drive. 

GAP insurance covers a wide variety of incidents that can occur to your vehicle in Deer Park. However, it’s important to note that GAP insurance only covers the damages done to your vehicle, and not bodily injury or another driver’s property. See what GAP insurance covers and what it does not cover below:

GAP Insurance Covers:

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

GAP Insurance Does NOT Cover:

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

Do I Need Gap Insurance?

GAP insurance is not a required form of insurance, meaning that even if it’s offered to you, you don’t have to purchase it. However, due to its low price – around $500 a year – and its generous coverage, GAP insurance is highly recommended. Having GAP insurance will give you extra peace of mind as you drive through Pasadena knowing that you won’t owe money on a vehicle you can’t drive in the unfortunate event of an accident. You don’t have to decide if you want to buy GAP insurance right away either. Unless there is a stipulation at your dealership or insurer that you have to purchase GAP insurance at the time of signing – you can purchase GAP insurance any time before you pay off your loan or before your lease term ends at a Pearland insurer. 

Explore Your Insurance & Finance Options at South Houston Nissan

Whether you’re ready to purchase a new vehicle or you’re interested in learning more about your insurance options, the finance team at South Houston Nissan can help you make an informed decision. Contact us today to learn more about the different insurance options available to you in Texas, or browse our other car buying tips for more information about the car buying process!

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