Does gap insurance cover a vehicle that's insured when in accident?
No, you are misstating what GAP coverage is. GAP insurance is a
separate type of insurance that you can purchase as part of your
finance agreement or on your personal auto insurance. What GAP does
is pay the difference in what your insurance company pays and what
is actually owed on the finance account for the vehicle. This is
especially important when a vehicle is newer. An auto insurance
policy pays either the cost of repair, replacement of the vehicle,
or actual cash value of the vehicle at the insurance companies
option. If the vehicle is totaled they pay ACV which on a fairly
new vehicle is less than the purchase price. Purchasing GAP
insurance is usually far less expensive when purchased from your
insurance company than the finance company.