GAP insurance is known as Guaranteed Auto/Asset Protection plan and it was established in North American financial industry. This insurance is the originally a difference between the actual sum of a vehicle and the balance still owed in the finance. This insurance is the coverage for new and small vehicles and heavy trucks. The insurance coverage is marketed for the low down payment loans, high interest loans and for the loans which has the longer term. It is offered by the finance companies at the time of purchasing new cars.
There are mainly two types of GAP coverage, the first one is an insurance policy that is sold by a broker. And the second one is a waiver agreement that is sold by a finance & insurance manager. This coverage is usually fixed with the loan and the claims are subject to a total loss. It doesn’t replace any group’s major medical health insurance policy, but it can adjust the major medical plan to achieve the desired results.
When should GAP Insurance plan is considered?
If someone has purchased a vehicle with a personal loan, then before taking the lease or purchase it with cash it should be considerable to take some additional protection so that the certain amount could be pay back in time. A new vehicle is generally being worth only around 40% of its original price within 3years of ownership.
Types of GAP insurance plan
are two main types of protection are available
Lease or Finance GAP
When the owner’s vehicle is declared a write-off by the motor insures in the case of theft or accident, there can be a shortfall between the vehicle’s current market value and the previous value required by the finance company to settle the agreement. The shortfall depends on the vehicle’s depreciated rate and the remaining period on the lease. GAP insurance covers this shortfall for the person.
Protection while purchasing a new vehicle for cash
In the case of a write-off Vehicle Replacement Insurance will cover the difference between the owner’s motor insurance payout and the replacing cost of the vehicle’s exact specification. But this policy is not available for the used cars. This type of insurance is also known as Return to Invoice.
Here are some alarming facts before dismissing this protection
Over 200,000 cars get stolen per year and only 60% of them are recovered.
Around 500,000 vehicles are involved in the serious accident each year.
UK vehicle crime is now the 1/3 of all crime.
The insurers will value the vehicle at the claim time but they will always offer less than the paid price.
This gap plan also comes in medical health insurance. So here is some information about that also
What is medical gap insurance? It is type of supplemental health plan that can work in tandem with the remaining ACA complaint health plan. But it neither is coverage of major medical health insurance, nor an ACA complaint.
What does medical gap insurance offer?
A medical gap plan provides lump-sum benefits for the covered illness and critical illness. These payments can be used as the insured individual choices but not limited
Medical bills before patient’s deductible could reach
Insured and copayment amounts
Different living expenses like groceries, rent, fuel etc.
Non-covered healthcare expenses
How does medical gap insurance work?
Whenever any covered illness or accident occurs, the plan pays the benefits as per the selected policy.
Is medical gap insurance right for you?
The decision is actually depends on the healthcare needs and the financial situations. It will never impact the pre-existing conditions or the eligibility for the plans. These plans have the guaranteed issue.