GAP Insurance Coverage Iowa IA

Reader’s Question:

My boyfriend just recently purchased GAP insurance in Iowa. I am quite confused on what GAP insurance cover. Does this mean that in case of death, GAP insurance will provide coverage? Just to clarify, I’m not wishing that my boyfriend be in that situation. I just wanna make sure that he’s getting the insurance he needs. Thanks!

Minnie

Cedar Rapids, IA

Hi there Minnie. I hope so that your boyfriend will not be involved in any vehicular accidents at all.

Going back to your question, GAP insurance does not normally offer coverage for death. To give you a better understanding what GAP insurance cover, let me give you a scenario.

I’m assuming that your boyfriend is still paying for his car. Let’s say he purchased it by loaning. Then he met a vehicular accident (which I hope he won’t) and as expected there would be damage on his car and it’s declared to be a total loss. Your boyfriend’s auto insurance company declared the current worth of his car for $25,000. Hence, they will provide you that money. However, the original worth of his vehicle is $35,000. So there’s a difference of $10,000 that your boyfriend still owe to the company who loans him the car. That’s where GAP insurance kicks in. It provides coverage for the balance that needed to be paid by your boyfriend to the financial company who loans him his vehicle.

With this scenario, I don’t see how death can be covered from GAP insurance. However, just to make things clearer, I would suggest it’s best to ask your boyfriend’s car insurance agent on the term and conditions of his GAP insurance coverage.

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