The Importance of Gap Insurance

Guaranteed asset protection (gap) insurance is designed to cover the difference between what you owe on your car loan or lease and the actual cash value of your vehicle if it’s declared a total loss.

Vehicles can depreciate quickly, especially in the first few years. It’s common for the loan balance to exceed the car’s market value. Without gap insurance, you could be left paying out of pocket for a loan on a vehicle you no longer have.

Why Is Gap Insurance Important in South Carolina?

Our team at GVL Insurance Company has seen firsthand how unexpected accidents or theft can create financial stress for South Carolina drivers. Gap insurance can be especially valuable if:

• You made a small down payment or financed most of your vehicle’s cost
• You have a long-term loan or lease
• Your car depreciates faster than average
• You drive more than average, increasing mileage and depreciation

In these situations, the risk of owing more than your car is worth is higher, making gap insurance a smart consideration.

How Does Gap Insurance Work?

If your vehicle is totaled or stolen, your standard auto insurance typically pays the current market value of the car, not the amount you still owe. Gap insurance covers the difference, so you do not have an outstanding loan balance.

Is Gap Insurance Right for You?

In South Carolina, gap insurance isn’t required by law, but many lenders and leasing companies may recommend or require it. If you’re unsure whether you need this coverage, our team can help you review your loan terms and vehicle value to determine your risk.

Contact us to get started.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.