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Insurance Glossary

Gap Insurance

Auto

Definition

Auto insurance coverage that pays the difference between what you owe on your car loan or lease and the vehicle's actual cash value if it's totaled or stolen.

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Related Terms

Actual Cash Value
The repayment value for indemnification due to loss or damage of property; in most cases it is replacement cost minus depreciation.
Total Loss
When the cost to repair damaged property exceeds a specified percentage of its value (typically 70-80%), or when property is completely destroyed. In auto insurance, this is often called a 'totaled' vehicle.
Accident Insurance
Insurance coverage for unforeseen bodily injury resulting from an accident.
Collision Coverage
Insurance coverage that pays for damage to your vehicle resulting from a collision with another vehicle or object.
Comprehensive Coverage
Insurance coverage for damage to your vehicle from causes other than collision, such as theft, vandalism, fire, weather events, or hitting an animal.
Term Life Insurance
Life insurance coverage for a specified period of time, providing a death benefit if the insured dies during the term.
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