What is Gap insurance?

January 8, 2026

Admin

Gap insurance insures a person for the difference between what you owe on a vehicle and what an insurance company determines is the vehicle’s fair market value. This insurance is a must for someone who is considering purchasing a new vehicle since a new vehicle depreciates right after it is driven off the dealer’s lot.

Depending on the policy, gap insurance usually covers accidents and thefts, but not all policies are the same, so it’s a good idea to evaluate the coverage being offered before purchasing gap insurance.