If you have bought or leased a new car, you should consider adding gap coverage to your Alaska car insurance plan. This provision makes up the difference between what you owe on the vehicle and its cash value. Since a vehicle starts to depreciate the minute you drive it off the lot, it’s very common for owners to be upside down when it comes to their loan.
Gap coverage may be offered by the dealer when you buy your vehicle, but you are not obligated to buy it from them. You can also shop around for gap coverage when you are looking for insurance for your new vehicle and have the company add it to your policy.
Here’s how gap insurance works: Your new (or relatively new) car is totaled in an accident. You owe $15,000 on the vehicle but its cash value is only $13,000. Your Alaska car insurance company will write a check for $13,000, less your policy deductible. Gap insurance will pay the lender $2,000 to make up the difference between these two amounts. The gap policy may even reimburse you for your deductible.
This type of coverage protects you from having to continue making payments on a car that you can no longer drive, and it is worth considering by anyone who is buying or leasing a new one. Before making a decision about where to get this coverage, take some time to get quotes from a few different companies offering this protection.