What Is GAP Insurance and Do You Need It?
If damages to a motorcycle or vehicle are approximately 80% of the value of the motorcycle or vehicle the insurance company is allowed, under Florida Law, to declare that motorcycle or vehicle a total loss. Insurance companies pay book value, not necessarily replacement value or what you might owe to your lien holder. What can you do to protect yourself in this situation if you owe more than the bike is worth? Gap Insurance, which will be the topic this exciting web video.
What Is Gap Insurance?
GAP Insurance is an important part of the buying process when you purchase your new motorcycle or vehicle. This type of insurance coverage is usually offered through the dealership where you are making your purchase. GAP Insurance is a separate policy than your bike or vehicle policy. In the event your bike or vehicle is deemed a total loss by an insurance company, either by accident or theft, GAP coverage will pay the balance of your loan after the insurance company has paid their part. If you owe more than the “fair market” or “book value,” you might be held responsible for the difference even if you are not at fault for a motorcycle or car that you no longer own. Again, insurance companies will usually consider a motorcycle or vehicle a total loss if the property damage to the motorcycle or vehicle exceeds 80% of the book value, not the amount that you might still owe on the motorcycle or vehicle.