I only have liability coverage. Does Gap insurance cover a total loss of my vehicle?

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Reader’s question:

I bought my auto insurance on-line, and I only have liability insurance. Does Gap insurance cover a total loss of my vehicle? 

-Emerson

Good question, Emerson.

Unfortunately, you’re completeled unprotected. Liabiliy coverage does not protect your vehicle—it only protects the damage you cause to others, whether that damage is to another person, or another vehicle. In order to protect your car from injury, you need to to get comprehensive and collision insurance. These should be easy auto insurance on-line buys—most websites will have lists of auto insurance on-line you can choose from.

The way GAP insurance works is that it is a specific type of insurance for leased cars. The actual cash value of the car (how much it was when you leased it) is often not the same amount as the cash value of a car if it’s totaled (what the insurance company claims its worth). GAP Insurance makes up the difference.

But if you have no collision insurance, and you’re in an accident, then GAP insurance will not cover the chasm between what you can pay, and what the actual cash value of the car is worth. If it did, that would make it very easy to engage in insurance fraud.

The good news is, if you get the right GAP auto insurance on-line, your credit score and premium aren’t affected as strongly if you get into an accident. My advice is to get collision auto insurance on-line, as well as GAP insurance if you’re leasing.

GLJ