GAP Insurance
GAP insurance covers the difference between what is owed on a vehicle and its current value. If your vehicle is totaled by covered perils such as accident, theft, fire or vandalism, insurance companies typically pay the actual cash value (ACV) of the vehicle. ACV may be less than its current retail value and is often considerably less than the amount still owed on the loan or the amount due for a lease payoff. If a loss occurs, GAP insurance will pay the difference between the ACV of the vehicle and the current outstanding balance on the loan or lease (and in some cases may also pay the deductible).