Personal Insurance - Loan/Lease Gap

If you buy or lease a new car, you may want to consider adding loan/lease gap coverage to your auto policy. This coverage pays the difference between the book value of a vehicle and the amount still owed on a lease or loan in the event of a total loss.

Ordinarily, your physical damage coverage provides you with actual cash value settlement (cost of the vehicle minus depreciation) in the event of a total loss. By having loan/lease gap coverage, you avoid the out-of-pocket expense that would occur due to a "gap" between the vehicle's actual cash value and the lease or loan amount.

Coverage applies only to the original lease or loan agreement, and must be requested within a specific frame of time from the date the agreement is signed. Check with your independent agent for details. The coverage does not apply to overdue payments, previously un-repaired damage, or the transfer of lease or loan balances to other vehicles.