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Loan/Lease Gap Insurance 

A totaled or stolen car is devastating. Finding out you owe more than the car is worth can only make matters worse. Auto loan/lease coverage can help you cover the difference.

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What Is Gap Insurance for Cars? 

Gap insurance, also called loan/lease gap coverage or auto loan/lease coverage, provides a financial cushion if your totaled or stolen vehicle turns out to be worth less than what you owe on your car loan or lease. 

When a car is totaled or stolen, your auto insurance gives you a settlement based on your car’s actual cash value (ACV), not what you paid for it. Since a vehicle depreciates the minute you drive it off the lot, your settlement may not cover what you still owe — leaving you with a big bill and no vehicle. Gap coverage is insurance that helps pay off your car loan when there’s a difference, or “gap”, between what you owe and the car’s ACV.

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Coverage at Westfield

What Does Gap Insurance Cover? 

Loan/lease payoff coverage only serves one purpose: to protect you when you owe more on your loan or lease than your car is worth. So, when gap insurance does not pay? This endorsement does not cover:

  • Vehicle repair costs
  • Rental car expenses
  • Damage to property
  • Bodily injuries, lost wages, or funeral costs
Man making a phone call after a traffic accident.
Real-Life Example

How Does Gap Insurance Work? 

Let’s say you buy a new vehicle with a $20,000 loan. You get into an accident and the insurance adjuster decides your car should be totaled. At the time of the accident, your vehicle is valued at $10,000, but you still owe $15,000 on your loan. This means you’re still on the hook for another $5,000. Gap coverage will help take care of that $5,000 balance — giving you significant financial peace of mind.

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Protection for Every Ride

Gap Coverage for More Than Cars

At Westfield, gap coverage isn’t just for your day-to-day car. You can add other types of vehicles to your auto insurance and have everything on one policy. Get loan/lease gap coverage for your: 

  • Motorcycle
  • RV
  • Camper
  • Snowmobile
  • ATV
  • Motor home

Is Gap Insurance Worth It?

From supply chain disruptions to increased repair and labor costs, the automobile market is ever-changing. Gap insurance can help you close the “gap” on how much your vehicle is worth and how much is left on your loan or lease.  

While this optional coverage provides clear benefits, whether you need it depends on your specific situation. If the potential gap between your loan or lease balance and the value of your car is of concern, gap insurance is likely worth exploring. 

Added Protection

Discover More Coverage Options

Roadside Assistance

When you have a flat tire or need a jump start, we can help you get back on the road

Uninsured Motorist

If you’re hit by an uninsured or underinsured driver, this coverage can help.

Umbrella Insurance

If a large claim is filed against you, umbrella insurance can help provide financial protection. 
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Get Loan/Lease Gap Insurance 

Don’t be left owing thousands on a totaled or stolen vehicle. Contact a local agent to get a quote or to add lease gap coverage to your auto insurance policy.
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Loan/Lease Gap Insurance

Frequently Asked Questions

There are several factors that gap insurance companies use to determine the cost of this coverage. Some of these factors include: 

  • Type of vehicle
  • ACV of the vehicle
  • Your claim history

Gap insurance providers include insurance companies, dealerships, and lenders. In general, loan/lease gap insurance may be more expensive if you purchase it through your car dealer or lender. That’s because the cost of the coverage is often lumped in with your loan amount, meaning you’d pay interest on the premium for the coverage.

Car insurance does not include loan/lease payoff coverage. When deciding if you need gap insurance, it really comes down to whether you can afford to pay the difference between your car’s ACV and what you owe on the loan in the event the car is totaled or stolen.

Of course, simply contact your agent to drop your gap coverage once it’s no longer needed.