Wednesday, December 18, 2013

Loan/Lease GAP coverage

What is GAP coverage?

Buying a new car this holiday season? If you are, this may be a good time to review the coverage limits on your auto policy. One coverage that you should look into if you are purchasing a brand new vehicle is GAP coverage. 

You've probably heard that your car depreciates in value as soon as you drive it off the lot. Well, what if a week after you drive your brand new car off the lot you get into a wreck and total your car? You could be left holding the bill for the difference in the depreciated value of the car and the money you still owe on your auto loan. That is where GAP coverage will fill the gap between the depreciated value of the vehicle and the amount you still owe on the loan.

Sometimes GAP coverage is included in your loan or lease agreement. It is a fairly inexpensive additional coverage that could wind up saving you a couple thousand dollars, so it is worth checking into!

Wednesday, December 11, 2013

Rental Car Coverage

Should I buy rental car insurance?

Does my auto insurance provide coverage for a rental car? We get this question a lot at Mason Insurance Agency. Unfortunately, this question is not followed by a simple yes or no answer.

Typically, a personal auto policy will extend coverage equal to what you have on your vehicle. For instance, if you have collision coverage on one of your vehicles then collision coverage is extended to the rental car. However, there are some significant gaps in coverage that you should take into consideration:
  •  Loss of use: should you damage your rental car, you could be left responsible for the income lost while the rental car was in the shop and could not be rented out.
  • Diminutive value: you could also be responsible for the difference in value of the vehicle pre-accident, and the diminished value after you damaged it. 
Some insurance carriers offer endorsements to cover these gaps in coverage. The best answer is to speak with your insurance agent before making a decision not to purchase insurance from the rental car agency.