Guaranteed Asset protection insurance has been created in the North American mortgage industry. GAP insurance is designed to protect the lender when the consumer's car is wrecked or completely destroyed, by paying off the difference between the outstanding balance on the loan and the value of the vehicle.
Gap coverage is one of the three main types of gap insurance and covers both the lender and the consumer. The consumer may not be insured, depending on the circumstances. The most common types of gap coverage are:
Gap insurance coverage is designed to protect the consumer from situations that can happen due to the inability of the consumer to repay the debt. It also helps protect the lender by protecting against loss due to bankruptcy, the inability of the consumer to make timely payments or due to personal problems.
Gap insurance is similar to a policy that protects the lender against property damage that occurs due to theft. The consumer pays an agreed upon amount for this coverage before the loan is complete. Some companies only pay out on the difference in loan and value or the amount the consumer pays for the coverage.
Gap coverage is an insurance policy that covers both the lender and the consumer when the vehicle is wrecked. A breakdown coverage pays for the vehicle to be towed to a repair facility and a rental car until it is repaired. If the vehicle is completely wrecked and cannot be fixed, the policy will pay for it to be towed to a workshop and a vehicle rebuilt.
Gap policies cover only the lender, not the consumer. Most gap policies include limits on liability, but some do not. A company should carefully review the terms and conditions of a gap policy when deciding whether to purchase it. Companies with a number of vehicles should consider a combination of coverage to insure the maximum amount that the company can afford and keep all aspects of the coverage in balance.
Gap coverage is similar to a liability policy, which covers both the lender and the consumer. The difference is that a gap policy pays out only the difference in value of the vehicle after it is rebuilt, towed to a repair facility and rental car. This means that a gap policy does not pay for any other expense associated with repairs or the rebuilding of the car that may arise after it is damaged.
Gap coverage covers both the lender and the consumer for damage to property. Most companies only pay out on the difference in loan and total value, and not the actual amount that the vehicle was worth when the loan was made.
Gap coverage allows the consumer to protect his or her financial interests as well as the lender in some situations. Gap coverage has two different purposes, to help protect the lender and protect the consumer.
Gallery of The History of Gap Coverage | gap coverage
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