Reader’s Question:
Is it advisable to acquire gap Insurance for my car insurance policy here in Milwaukee, Wisconsin, before a take out a car equity loan?
Tyler
Milwaukee, WI
Although it is not necessarily required, some lenders will actually require you to get and carry a gap insurance policy on your auto insurance before agree on financing your car. The reason is that with a gap policy in place, your lenders are assured that in the event your car gets totaled in a car accident, gets lost or stolen, or otherwise incur damage beyond repair, considered as “Total Loss”, gap insurance will provide the necessary safety net should your regular car insurance fails to sufficiently cover for the loss or damage of the vehicle (and to pay for any outstanding balances on your car loan or lease).
You need to be aware of your vehicles Actual Cash Value or ACV (the value being preferably quoted by a third party, not your insurance provider) since this will determine how big of a gap insurance coverage is necessary. This type of coverage is not really expensive since it the usual gap amount being insured is note very big. It is not advisable to keep this type of car insurance for a long period of time, especially after the maturity of your loan, or when the remaining loan balance is less than the car’s ACV. The amount of gap insurance needed will also vary depending on car type, car age and on your lenders policy as well.
Tags: auto warranty, car insurance, car insurance discounts, cheap auto insurance
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