GAP Insurance

Gap insurance is an optional, add-on auto insurance coverage generally taken by car dealers which helps their customer to cover the “gap” between the insured value of the car and the depreciated value in the event of a total loss to insured’s vehicle. 

GAP insurance only applies to vehicle total losses either accidental or theft as covered under own damage section of unified motor insurance policies and does not apply to third party liabilities. If your vehicle meets with an accident which results in a total-loss or is stolen, you could lose as much as 20% of the vehicle value in depreciation. The GAP insurance policy covers this risk associated with depreciation.