Guaranteed asset protection insurance (or GAP Insurance) is an insurance coverage offered as a supplement to automobile insurance policies. It provides financial protection from certain types of loss that are not covered by standard automobile insurance.
GAP is designed to cover the unpaid balance of an automobile loan in the event of a total loss of the vehicle. GAP covers the difference between the depreciated actual cash value of a lost vehicle and the outstanding loan balance on the vehicle. The coverage may also include payment of the physical damage deductible.
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Guaranteed asset protection insurance Wikipedia(Text) CC BY-SA