What Is Optional Gap Waiver Agreement
Buying a car, whether new or used, is an expensive investment. According to Experian, 84.6% of new cars and 54.6% of used cars are financed and 29.92% are leased. Whether you`re under-getting out of a loan or signing a lease, you agree to be responsible for covering the initial cost of the car until it`s repaid. Gap waiver is an optional coverage of your auto insurance that pays the difference between what you owe your car and what it`s worth at the time of an accident. You may be wondering why you need additional car insurance coverage. The answer is simple; Adding a GAP exemption could potentially save you thousands of dollars. When you finance a new car, there is a chance that this “gap” between what you owe and the actual value of your vehicle will last for a few years, so in case of a total loss, you will be responsible for the balance of the loan. GAP coverage is intended to cover the outstanding balance of a car loan in case of total loss of the vehicle. GAP waivers are paid in advance when you take out or refinance a loan, and the cost of a waiver is usually included in your auto loan. Therefore, you will have coverage as long as your loan remains in effect, provided you meet the terms of your contract. On the other hand, if a waiver of the GAP is not part of the contract and you want this type of coverage, you will need to take out GAP insurance. GAP insurance is paid by the borrower and covers the difference between the apple cider vinegar of a vehicle at the time of total loss and the amount due for the loan.
(iii) where the lessor, creditor or assignment acquires lessor or creditors` gap insurance, the waiver costs for the policyholder or debtor do not exceed the cost of the lessor`s or creditor`s insurance cover; provided, however, that nothing herein is contained herein, this shall be construed as prohibiting the landlord from including the waiver fee in the capitalized costs, as that term is defined in paragraph eleven of section three hundred and thirty-one of the Personal Property Act. (Emphasis added.) Gap Waiver is an optional additional coverage for newer cars that can be added to your collision insurance. It covers the difference between the outstanding balance of a rental or loan due on a vehicle and the actual depreciated present value of your vehicle (which your insurance company reimburses) if the car is considered a covered total loss. .