Trucks can play a major part in many different businesses. They can be used by major retailers to transport goods from one location to another while owners of smaller companies may utilize them for carrying tools and other heavy working equipment. Many truck owners can easily forget how vital a role their vehicle can play within an everyday working environment until something actually happens to it. If a truck is declared a total loss after an accident and there are still outstanding loans secured against it, GAP insurance can literally be the one major difference in keeping a company afloat or seeing business owners closing their doors forever.
If a truck is completely unusable after an accident, GAP insurance will cover any shortfalls between the final settlement figure offered by the auto insurance company and any loans or outstanding payments that are related to the vehicle. As an example, a $50,000 truck will depreciate in value as soon as it is used for the first time.
However, the interest rates applied to any loans secured on the vehicle may leave the owner with a significantly higher sum to repay (in this case, we will assume that $60,000 worth of repayments are due). If the auto insurance company estimates the value of the truck to be $40,000 after depreciation is allowed for, GAP insurance will cover the $20,000 difference so that all outstanding loans can be repaid.
GAP insurance can also be a worthwhile addition to an auto insurance policy for smaller vehicles, especially newer cars where there are still outstanding payments due on any loans taken out to make the original purchase. This excellent feature can be factored in to any auto insurance policy to offer vehicle owners financial security and complete peace of mind.