Does gap insurance cover the difference between the value of my financed car and the amount owed on the loan if it’s totaled while I’m renting a car?

Gap insurance typically covers the difference between the actual cash value (ACV) of a vehicle and the remaining balance of a loan or lease in the event of a total loss.

Gap insurance does not automatically cover rental cars.

However, if you have gap insurance on your personal vehicle and you are involved in an accident while driving a rental car, your gap insurance may cover the difference between the insurance settlement and the amount you owe on your loan or lease.

Gap insurance may also provide coverage for a rental car if your personal vehicle is being repaired due to a covered loss.

Gap insurance is typically sold through car dealerships or auto insurance companies.

The cost of gap insurance varies depending on the provider and the terms of the policy, but it generally costs between $200 and $700.

Gap insurance is not required by law, but it may be required by a lender if you finance or lease a vehicle.

Gap insurance is typically only applicable to new cars, as the value of used cars depreciates faster than the loan balance is paid down.

Gap insurance does not cover damage to the rental car, the deductible on a car insurance policy, or any other expenses related to the rental car.

Gap insurance policies may have limitations on the amount of coverage provided, so it is important to read the policy carefully and understand the coverage limits.

Gap insurance is designed to cover the gap between the ACV and the loan balance at the time of the incident, but it does not cover negative equity that existed before the incident.

Gap insurance coverage typically ends when the loan or lease balance is paid off or when the vehicle is sold.

Gap insurance can provide peace of mind for drivers who owe more on their vehicle than it is worth, as it can help avoid financial hardship in the event of a total loss.