If you're looking into GAP car insurance coverage, Farmers prices have a lot to offer
When you sign up for a car insurance policy, your goal is to build a policy that will best protect you and your family. There are certain types of insurance options that are completely optional, while others are required by state law. When it comes to GAP car insurance coverage, Farmers' prices for its customers' policies will depend on several different factors.
What GAP covers
GAP is an acronym for Guaranteed Auto/Asset Protection insurance coverage. As it relates to automobiles, GAP car insurance covers the difference between the amount you still owe to a lender or a lessee and the amount of money the car is determined to be worth at the time of a total loss. GAP car insurance protects you in the event that your car is involved in a car accident that results in a total loss. It also protects you if your car is lost or stolen.
Get free quotes on GAP car insurance coverage policies
When it comes to GAP car insurance prices, Farmers' rates are not that high when you consider what the insurance covers. If you've just bought a new car, this type of insurance can save you a lot of cash if the car ends up as a twisted pile of metal. The problem is that many people don't think to add GAP coverage to their policies. They view it as an extra, unnecessary expense, and they're willing to take the risk. What those people may not realize is that if they don't add it to their policies at the time of purchase, they generally won't be able to add it later.
GAP insurance is important because as soon as you purchase your car, its value begins to decrease in the eyes of the marketplace and therefore, in the eyes of your car insurance company. Surveys from organizations as varied as the National Automobile Dealers Association (NADA) and the Consumer Products Safety Commission (CPSC) estimate that the average new car will lose between 18-30 percent of its cash or market value each year, depending on the make and model.
Should you add GAP?
If you get into an accident or your car is lost or stolen, your standard car insurance policy will only cover the amount the car was worth at the time of the loss. Since auto loan amortization rarely progresses as quickly as new car depreciation, there's a good chance you'll still owe your lender close to the full value of any loan you've taken out on your car and if the collateral no longer exists (i.e. the car is gone or totaled), they can demand immediate repayment. When you've got GAP car insurance coverage, Farmers' prices and rates will no longer seem like a big deal when you realize what the insurance covers.
New car buyers who should consider GAP coverage are those that meet some of the following conditions:
- They've put a down payment of 20 percent or less on the car
- They've taken negative equity from a previous car loan and rolled it into the new car purchase
- Their loan term is 72 months or longer.
- They've bought a car that depreciates quickly, like a sports car.
If you've leased your car, your lessee will probably require GAP insurance. If it's not required, you should definitely look into getting it as it can be used to pay off any remaining lease costs or balloon settlements should a car you are leasing be stolen or totaled.
Some unique Farmers features
In addition to the traditional elements of GAP car insurance offered by Farmers, they have a unique twist to this type of coverage options. Farmers offers a New Car Pledge program that can be added along with full GAP car insurance. With the pledge, Farmers will replace a new car, without depreciation, if it is deemed a total loss within the first two years of ownership or the first 24,000 miles of driving (whichever comes first).
Under this program, not only would you have any outstanding loan or lease balance retired in the event of a total loss of your new car, you wouldn't have to go through the hassles of re-acquiring a new car. Depending on the make and model of your car, where you live and a few other factors, this additional GAP car insurance from Farmers can be added for as little as $10-12 in additional monthly premium.
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When it comes to GAP car insurance coverage, Farmers' prices are relatively inexpensive, and it may well serve you to speak with a local car insurance agent with access to leading companies like Farmers. An agent can answer all of your car insurance questions, offer you several competing proposals to consider, and even get you started on the process of upgrading your car insurance coverage. Reply! can help by connecting you to car insurance agents in your area familiar with all the car insurance coverage options available to you, including GAP car insurance.