Total loss protection is also known as Gap insurance. The gap that it refers to is the difference between a totaled car’s value and the amount owed on the lease or auto loan. In as little as 3 years, your car could be worth significantly less than the payoff of your loan.
In the event of the car being a total loss, the gap can equal out to be several thousands of dollars that you would have to pay for out of your own pocket. This is calculated after the insurance pays the cash value of the totaled vehicle.
Excluding any past due amounts or late fees, the difference between the totaled car’s depreciated value and the loan is waived by the lender/dealer with Gap Protection. This means that in the event of a collision that renders your car totaled, all you have to pay is the deductible on your insurance.
Gap Plus Protection, or GPP, waives the out-of-pocket expenses just like basic Gap insurance. But it also includes the deductible of your insurance company, up to $1,000.
Not all states have this coverage available. Make sure to contact your local dealer for details.
The Total Loss Protection coverage terms and conditions set the qualifications for this policy option. This information is only an outline of those terms. It shouldn’t be relied on at the time that you purchase a new vehicle. Make sure to review the GAP Addendum/Total Loss Protection to learn about the exact conditions and terms.