If you have Gap insurance on your loan for your vechicle do you need to still have comp and collision or can you just insure yourself?

Answer 1

GAP insurance only covers the difference between what your car is worth and what you owe. So if your car is only worth $8,000 and the balance on the loan is $10,000, GAP insurance will only pay the $2,000 if your vehicle is determined to be a total loss by the insurance company. You still need to have physical damage coverage (Collision and Comprehensive) for the vehicle. If you don't, your finance company will get their own coverage. It's called forced placed insurance. Your finance company will charge you for it, you will not get any benefits from it, and it will cost you more money than if you insured it yourself. You should also find out how much your GAP insurance covers. Some cover up to 150 percent of the value of your car, some only cover 115. Using the same numbers; if your vehicle is only worth $8,000 and your policy only covers up to 115 percent of the value, GAP insurance would only pay $1,200 and you would have to pay the remaining $800.