What is gap insurance

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Gap insurance, a financial safeguard for car owners, bridges the disparity between a vehicle’s depreciated value and the outstanding loan balance in the event of theft or total loss. This specialized coverage ensures that the policyholder is not burdened with the remaining loan amount, offering financial protection beyond the standard auto insurance coverage. In essence, gap insurance acts as a safety net, preventing financial gaps that may arise due to the discrepancy between the car’s value and the remaining loan obligation.

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