Wawanesa: Gap Insurance Coverage

Wawanesa offers gap insurance as part of its full-coverage auto insurance policies. This is in addition to the standard auto insurance coverages it provides, such as roadside assistance and rental reimbursement coverage. Wawanesa's auto insurance is currently only available in California.

What is gap insurance?

Gap insurance is an optional form of insurance that covers the difference between the amount owed on an auto loan and the amount paid out by the insurance company in the event of a total loss, such as the car being stolen or written off in an accident. This difference is known as the "gap".

When you buy a new car, it starts to depreciate in value as soon as it leaves the dealership. Most cars lose 20% of their value within the first year. Standard auto insurance policies cover the depreciated value of the car, paying out the current market value at the time of the claim. However, in the early years of the vehicle's life, the amount of the loan may exceed the market value of the car. Gap insurance is designed to cover this difference.

For example, if you have an accident and total your car, your insurance company will pay out the current market value of the car. However, if the amount you owe on your auto loan is higher than the value of the car, you will be left with a shortfall. Gap insurance will cover this shortfall, protecting you from financial loss.

Gap insurance is typically offered by car dealers when you purchase or lease a new car. It can also be purchased from your auto insurance company, and some direct lenders also offer gap insurance policies. It is important to compare prices and coverage before purchasing a policy.

Wawanesa offers gap insurance as part of its auto insurance coverage in California.

Does Wawanesa offer gap insurance?

Wawanesa offers auto, home, renters, and condo insurance to clients in Canada, Oregon, and California. The company provides competitive rates for its auto coverage policies, which come with flexible payment terms and the ability to file claims 24/7. Wawanesa offers the standard auto insurance coverages, including roadside assistance and rental reimbursement coverage. However, there is no mention of gap insurance in their list of standard coverages.

Gap insurance, also called guaranteed asset protection, provides protection when the insurance settlement after a total loss doesn't cover the remaining loan balance on a financed car. It covers the difference between your collision or comprehensive insurance payout and the balance on your auto loan after vehicle theft, damage, or total loss.

While Wawanesa does not explicitly mention offering gap insurance, they do provide comprehensive policies that cover fire, theft, and other disasters, with additional coverage options. It is best to contact Wawanesa directly to inquire about gap insurance and whether it is included in their comprehensive policies or offered as an optional add-on.

What does gap insurance cover?

Gap insurance is an optional form of insurance that covers the difference between the amount owed on an auto loan and the amount paid out by an insurance company in the event of a car being stolen or totalled. This is also known as guaranteed asset protection (GAP) and is intended to cover the loss suffered if the loan balance is higher than the value of the vehicle.

For example, if you finance a $25,000 car and a few months later it is in an accident and declared a total loss, gap insurance will cover the difference between the insurance payout and the outstanding loan. If the insurance company determines the car's value to be $20,000, but your loan balance is $24,000, gap insurance will cover the remaining $4,000.

Gap insurance does not cover costs related to vehicle repairs, personal injuries, or other accident-related expenses. It is also not required by law, but lenders or lessors may require drivers to carry it as a condition of a loan or lease.

Wawanesa does offer gap insurance as an option, in addition to rental car reimbursement and roadside assistance.

How much does gap insurance cost?

The cost of gap insurance varies depending on where you purchase it. If you buy gap insurance from a dealership, it can cost hundreds of dollars a year. If you add gap coverage to an existing car insurance policy, it typically costs $20 to $40 per year. This will increase your premium by around $40 to $60 per year.

If you take out a loan to purchase your car, you can add gap insurance to the agreement. In this case, you'll pay a one-time flat rate of $500 to $700 on average.

Some auto insurers offer gap insurance as a standalone, separate coverage option. When you choose this option, the average cost is a one-time fee of $200 to $300.

Where can you buy gap insurance?

Gap insurance is designed to protect automobile owners if their car is totaled or stolen. It pays the difference between the amount you owe on a car loan and the car's actual cash value. This could be extremely valuable if you owe more on your car than it is worth.

You can typically buy gap insurance for a new car from the dealer or your auto insurance company. Buying gap insurance from a dealer can be more expensive if the cost of the coverage is bundled into your loan amount, which means you'd be paying interest on your gap coverage.

You can usually add gap coverage to an existing car insurance policy or a new policy, as long as your loan or lease hasn't been paid off. Buying gap insurance from an insurance company may be less expensive, and you won't pay interest on your coverage.

You can also buy gap insurance from a company offering stand-alone gap insurance policies or from the bank/financial institution that offered you a loan for purchasing your car.

It's important to note that gap insurance must be purchased at the same time as your car, and you must be the car's first owner. Additionally, to be eligible for gap insurance, car owners must have comprehensive and collision coverage on their auto insurance policy.

Frequently asked questions